A plan to build 90 high quality homes between two villages has been turned down.
Corby Council has refused to give landowner Bill Kiff planning permission to build the houses on land behind Cottingham Hall and near Middleton.
The plan divided the community with 126 people writing to the council in support of the development and 207 writing to express their opposition.
Sue Hall, of Church Street, Cottingham, said: "We are delighted Corby Council followed its own guidelines. We expect Mr Kiff to appeal."
Council officers, using delegated powers, decided the development would have increased the amount of traffic on village roads to unacceptable levels.
They also said there were not enough services, such as shops, in the villages to cope with extra residents and that the development would have been too far outside both Cottingham and Middleton.
Co-founder of the protest group Against Building in Cottingham Julie Grant said: "I'm absolutely delighted. Traffic in the villages is just about bearable at the moment but it would have become a nightmare if this development had gone ahead.
"If Mr Kiff appeals or submits another application we will keep on fighting."
The houses would have ranged in price from 200,000 to 500,000.
If the plan had been approved Mr Kiff would have donated 300,000 for a new
village hall in Cottingham and 150,000 would have gone towards a new community facility for Middleton.
He pledged a further 20,000 for traffic-calming measures and St Mary Magdalene Church would have received 20,000 for repairs, with Cottingham Methodist Church receiving 10,000.
Maggie Silcock, of Berryfield Road, Cottingham, said: "Corby Council doesn't have this right.
"I thought it would have been the planning committee which would have made the decision."
Cottingham, Middleton and East Carlton parish councils all objected to the proposals, along with the Campaign for the Protection of Rural England.
Mr Kiff said he would continue his efforts to get the scheme approved.
He said: "They may have won the battle but they will not win the war."