A proposal by developer Arkleton Ltd to turn the Old Tramyard on Castle Street in Dalkey, Co Dublin, into an apartment and office complex has been vetoed by An Bord Pleanála.

Arkleton, whose directors are James Monaghan and Rodney Sheils, were refused permission to build 28 apartments and offices in four commercial units and to refurbish and reinstate the entrance gates, piers, tram tracks and cobbles. It also sought to turn a space to the rear of the site into a tram-shaped kiosk and a playground. The former tramyard site is near the Queens pub and the residential area, White's Villas, is to the rear.

In making its decision, An Bord Pleanála overruled its inspector's recommendation to grant permission on the grounds of the limited extent of the site and its location in relation to adjacent residential property and its "quantum, scale and layout . . . which includes residential accommodation in basement format, with poor quality provision of private amenity space".

It said the inspector's recommended modifications would not be sufficient and that more wide ranging changes to scale and layout were required.

Last year, a planning application for a similar development was refused permission on the grounds of visual obtrusion and loss of the original tramline route. Since 1999, a number of proposals for the site have been refused by either An Bord Pleanála or the local authority.

The bord's decision will be welcomed by the three parties who appealed planning permission to the board, Dalkey Community Council, An Taisce and Peter Borza, a local businessman with a property next door to the site.

An Taisce opposed the development because it said the proposal to lift the cobblestones and tram lines will destroy their patina of age. Dalkey Community Council said the development would have an adverse impact on the boundary walls of the tram site and the Queen's pub, a protected structure.