Proposals for 35 homes on Bethwines Farm, at the land south of Ivy Lodge, Blackboy Lane, were initially turned down by in April. Chichester District Council ruled that developers were unable to justify the need for affordable dwellings in the area.
The proposals had received more than 300 official objections, with fears that the 'beautiful farmland' will be 'irreparably destroyed forever'.
Fishbourne Developments Ltd submitted a fresh application in October, claiming that it was a 'prime opportunity' to 'boost low cost housing'.
However, the district council has maintained that there is 'minimal evidence' to justify the need for low cost home ownership 'over and above what is already being delivered'.
The decision notice read: "The proposed development by reason of its cramped layout, would not constitute high quality development within the countryside and results in a contrived, overdeveloped and incongruous form of development that would detract from the wider semi-rural character and appearance of the locality and takes little account of the existing pattern and form of development within this edge of settlement location."
Fishbourne Parish Council said it 'warmly welcomed' the decision adding that the sheer number of objections for both applications left 'no doubt as to the strength of public feeling' against the plans.
“We recognise the national need for more housing,” said council chairman Geoff Hand. "But we believe the need should be met from sites which are sustainable rather than using up top quality farmland and causing irreparable damage to iconic views.
"We also believe that in making planning decisions it is important to remember that we are not just dealing with roofs over heads but we are also determining the quality of life of those who live in and around the development.
"The cramped layout of the proposal would not constitute high quality development within the countryside and it would detract from the wider semi-rural character of the locality."
Adrian Moss, Chichester district councillor for Harbour Villages Ward, said the application 'did not meet the needs of the community' and is 'not in line with the village’s aspirations', as being developed by the Neighbourhood Plan review group.
He added: "The application does not meet the criteria set down for Entry Level Sites. These houses do not constitute 'affordable housing' n Fishbourne.
"Our need is for low cost small rented social housing, our need is for affordable houses for local people."