Proposals to build up to 160 homes on greenbelt land have been refused permission, denting an engineering firm's plans to relocate in the process.
Peter Duffy Ltd, which has operated on land at Park View in Lofthouse since 1998, wants to move to the Flanshaw Industrial Estate on the west side of Wakefield, in a bid to expand its business.
But that was dependent on the firm obtaining planning permission to redevelop its current base into housing.
Councillors rejected the plan by a single vote at a meeting on Thursday after some expressed concerns about low levels of affordable housing and the potential impact on local infrastructure.
Speaking afterwards, the firm's owner Peter Duffy said the decision would "damage" his business, which he argued had outgrown its Park View site.
He told councillors the current base was limiting the jobs the company could take on, and it was unable to run all hours of the day because of its closeness to other homes.
He said: "We've taken a long-term view and taken the strategic decision to relocate our business.
"Where we are now restricts our potential growth. It's a 24/7 world these days and we need to run a 24/7 business. We can't do that at the moment because of where we are.
"This will benefit the residents of Lofthouse as well."
Several councillors spoke up in favour of the application, which received no objections from members of the public.
Stanley and Outwood representative Jacqueline Williams, who was unable to vote on the matter, said that Peter Duffy Ltd had ended up in a residential area "through no fault of its own" because homes had been built around it.
Labour councillor Celia Loughran said that nearby residents would be "relieved" to see the business move because its operations were a "horrible sight" and more appropriate for an industrial estate.
The company was described as a "good employer" and the committee was told it had a strong record on training and apprenticeships.
But the proposal was criticised because only 18 per cent of the homes were earmarked for affordable housing, well below the council's standard threshold of 30 per cent for planning applications.
Councillor David Jones said: "I'm very concerned about this because this is district requires more affordable housing.
"The figure you've come up with is nowhere near that.
"It's not big homes we need, it's affordable homes.
"There's too much pressure on infrastructure in this area, in terms of schools, doctors and so forth."
Mr Duffy's agent Adam Key responded by saying the proportion of affordable homes was likely to change and that the company would honour a commitment to releasing money to help with infrastructure if the plans were approved.
The committee ruled that "special circumstances" needed to be demonstrated by developers to build on greenbelt land had not been proved.
Speaking afterwards, Mr Duffy and Mr Key described the result as "disappointing" and said they were unsure whether or not they would appeal the decision.
Mr Duffy said: "It will damage the business. That's why we're here today.
"I think the committee got its priorities mixed up."
Report supplied by the Local Democracy Reporting Service