Developers are considering their options after being blocked this week in their ambitions for a housing estate on the site of the former Sheffield College in the Loxley Valley.
Councillors maintained a tight grip over the green belt, ruling that the company Persimmon Homes had not made a sufficiently strong case to be exempted from the usual restrictions on development.
The application for 79 houses and 29 apartments off Wood Lane was judged to fall short in terms of its design, layout and its appearance in such sensitive surroundings.
Persimmon now have the options of appealing to the Government or submitting revised proposals.
Neil Follows, deputy managing director for Persimmon Homes South Yorkshire, said: "Naturally we are extremely disappointed that Sheffield City Council has rejected our plans for the development of the former Loxley College site and we are now considering our options.
"Not only would the scheme have brought much needed housing to the area, including an affordable housing provision, it also included the re-establishment of playing fields with additional sports pitches in line with the requirements of Sport England, along with the improvement of 6.75 hectares of open space for the benefit of the local community."
But councillors felt that the developers had failed to meet the strict requirements for a green belt location and thought the council's own officers had not gone far enough in spelling out the grounds for objection.
They wanted the bar raising for the developers.
Coun Arthur Dunworth said: "I think we have to bolster up the reasons for refusal."
Coun Jackie Drayton added: "It is not just about individual homes but about how they relate to the area.
"I am quite disappointed by the lack of affordable homes in the scheme, too."
But Coun Robert MacDonald said: "Something has to be done with that site as there are some horrible buildings that are becoming more and more derelict. I think that a strong case for housing could be made on this site."
A public consultation by the council resulted in 152 letters of objection, raising issues such as the impact on the green belt, an increase in traffic, especially at Malin Bridge, and the risk of setting a precedent elsewhere in the Loxley Valley, at the former Hepworths and Pinegrove sites.
Protests were lodged by the Loxley Valley Design Statement Group, Loxley Valley Protection Society and the Campaign to Protect Rural England.
Sheffield College closed the campus when it relocated to Owlerton and is looking to raise money through development of the site.