Dublin City Council last night rejected a local area plan for Ballsbridge which would have paved the way for high-rise development of up to 20 storeys.
The move thwarted the ambitions of a number of property developers who had lobbied for a change in the current zoning, which provides for the preservation of residential amenity.
The councillors' decision means a new local area plan must now be prepared. In the meantime, developments in the area will be restricted to the heights of existing buildings.
Assistant city manager Michael Stubbs told The Irish Times it could be a year before the matter is revisited, as the council's next priority was to advance area plans for Phibsboro and then Rathmines.
Among the property developers with land holdings in the Ballsbridge area are Sean Dunne of Mountbrook Homes, who paid €119 million for the Berkeley Court Hotel on Lansdowne Road and €260 million for the nearby Jurys Hotel and Towers.
Another developer, Ray Grehan paid €171.1 million - €84 million an acre - for the former veterinary college on Shelbourne Road.
Other landowners in the area are builder Bernard McNamara, who owns Carrisbrook House on the corner of Northumberland Road, and the State, which owns Lansdowne House on the opposite corner, between Lansdowne and Northumberland roads.
A spokesman for Mr Dunne last night told The Irish Times the developer was considering the council's decision and would comment further over the coming days.
He commented that Mr Dunne bought the site with a residential zoning "and it still has a residential zoning".
Last night's rejection of the local area plan came after members of the council's south east area committee passed a motion calling for the full council not to defer the decision, but to reject the plan.
No councillor voted in favour of the plan at the subsequent full council meeting. Only councillors Deirdre Heney and Michael Donnelly of Fianna Fáil questioned the council's wisdom in calling for the scrapping of a plan the members had initiated. "We have not covered ourselves in glory here today" said Mr Donnelly.
City manager John Tierney expressed disappointment with the councillors' stance, commenting that he had hoped the decision might be put back to allow for more consultation with the public.
He said "it was irrelevant to us who buys the sites and what they paid for them.... I believe all this confusion about the plan being developer led is just that, confusion".
He rejected the allegation that the plan was "writing blank cheques" for developers and accused the councillors of not making significant contributions at the drafting stage.
"I don't believe the process was engaged in, " he added.
