Plans to turn Edinburgh’s neoclassical Old Royal High School into a luxury hotel have been refused by the city council.

Developers Duddingston House Properties and Urbanist Hotels had proposed a £75m (US$115m, €102m) project to restore and convert the listed 1820s property – which has stood vacant for almost 50 years on Edinburgh’s Calton Hill – into a 147-bedroom Rosewood hotel featuring two newly-constructed landscaped wings.

A spa, fitness centre, indoor swimming pool, three restaurants and bars and a ballroom were all planned for the complex, designed by Hoskins Architects.

However, planning officers had advised the project be rejected due to the impact it would have on the city’s built heritage, and on 17 December the council voted 8-7 to accept this recommendation.

“This was a very difficult decision, and not one we took any pleasure in taking, but it came down to the scale of the development, which was ultimately too great,” said councillor Ian Perry, planning convener for the council.

“Our job is to make sure that any development in Edinburgh strikes a balance between protecting the city’s heritage and developing its economy. Committee members have agreed with planning officers’ recommendations that this application fails to do this, and have therefore refused to grant it.”

Hoskins Architects had made changes to the plans earlier this year in response to the concerns of heritage groups, and pledged the design would blend into the surrounding landscape while “reinforcing the building’s prominence as a key Edinburgh landmark.”

Independent research from Oxford Economics has estimated that the hotel could have contributed £31.5m (US$48m, €42.3m)to Edinburgh’s GDP and £36.7m (US$56m, €50m) to Scotland’s economy on an annual basis.

Other Edinburgh development projects have caused contention of late, with heritage groups criticising a planned £850m (US$1.3bn, €1.2bn) scheme in the city’s St James Quarter, which includes the five-star ‘ribbon’ hotel designed by architects Jestico + Whiles.