Pinewood film studios has been refused permission to develop one of its sites, blocking plans to create almost 1,000 new jobs.
Communities secretary Eric Pickles has denied Pinewood studios planning permission to build a giant city centre film set in the Buckinghamshire countryside.
The £200m development would have been built next to the existing studios, visited just last week by Prime Minister David Cameron .
Harry Potter and James Bond are among the blockbusters to have been shot there.
Named Project Pinewood , the expansion was due to have dual usage, also providing up to 1,400 new homes. People would live in the buildings when they were not being used for filming.
The owners of the studios said the development would have provided a big boost to the UK film industry and economy.
This included the creation of 960 new jobs by 2022, while 420 of the new homes would have been affordable housing.
Pinewood also claimed the proposals would have significantly reduced the costs of filming on location for the UK film industry. It would have incorporated 'streetscape' sets of film hotspots such as Venice, Amsterdam, Prague and New York.
But there was outrage among locals in surrounding villages who argued it would be a blot on the landscape.
The plans were also met with stern opposition from South Buckinghamshire District Council.
The final decision laid with the Department for Communities and Local Government , which refused planning permission on the grounds that it would be harmful to the area's environment and it was not in line with local development objectives.
Ministers also said there was insufficient evidence of the potential employment benefits.
Pinewood Shepperton's shares fell on the announcement.
In a statement the company said it was "disappointed" by the government's decision and would now pull the plug on the project.