Proposals submitted by Graham’s The Family Dairy, which included plans for 600 homes and a new primary school at Airthrey Kerse, were rejected by councillors by 12 votes to eight (with two abstentions) at a special meeting last week Wednesday.

The decision was made on the grounds that the houses would be on an area of greenbelt land and over concerns about flooding and other issues if the plans were to go ahead.

More than 440 letters of objection were submitted, citing concerns over the impact on wildlife and pollution, while the plans attracted 76 expressions of support.

The company’s managing director Robert Graham described the decision as “desperately short-sighted” and said it remains committed to the project.

The company had said the project would enable them to finance plans for a new dairy and product development facility at the Hill of Drip farm and create 400 new jobs and 50 additional apprenticeships.

Robert Graham said: “This decision demonstrates the huge challenges that exist towards delivering investment in Stirling.

“In going against the recommendation of its officers and the advice of national agencies, the city has been done a huge and potentially long lasting disservice.”

Scottish Greens environment spokesperson Mark Ruskell hailed the Airthery Kerse decision as “momentous”.

The councillor for Dunblane & Bridge of Allan said: “This is a momentous decision that has been the culmination of years of campaigning by our communities to protect the precious greenbelt of Airthrey Kerse. The majority of Councillors made absolutely the right decision to stick with the democratically agreed Local Development Plan and uphold the policies that protect this greenbelt landscape from destruction.

“It’s clear the argument that Stirling has a housing land shortfall is being used by developers to try and build anything anywhere against our agreed plan. Despite this we see acres of brownfield sites lying abandoned simply because developers choose premium location greenbelt sites that they can maximise profit on.

“It is inevitable that the developer will appeal this decision and while that appeal will be conducted by Scottish Government planners, it is the SNP minister Alex Neil who will demand the final say. I only hope that the importance of our informed and democratically agreed local policy holds sway.”