Developers are deciding whether to appeal a vote which saw plans for 1,560 homes east of Watermead thrown out.
Hallam Land wants to build on the site, but opponents warned the scheme would swamp Watermead and Bierton and cause traffic chaos.
A report by a council planning officer slammed the plan, saying the proposal would damage the environment, be a flood risk, fail to provide employment and was out of keeping with the council’s own long-term plan for development in the Vale.
Case officer Claire Harrison recommended councillors refuse planning permission and Aylesbury Vale District Council’s strategic development control committee has now done so.
A Hallam spokesman said: “As suggested when the application was submitted, the lack of progress on the local plan meant that a number of major planning applications were submitted around the town and thus a planning application was the only route available for Hallam’s proposal to be considered against other proposals.
“Now that the application has been refused by the district council, appealing the decision might offer the opportunity for all schemes to be weighed up together in relation to the overall need and demand for housing.”
Parish council chairman Sue Severn said they were delighted with the decision and ‘cautiously optimistic’ about the possibility of an appeal.
She said: “We will be looking out for an appeal and will vigorously defend our position.
“We are delighted with the support that we have had for our position from the community.
“It just proves that there is strength in numbers and that if a community pulls together it’s possible to achieve your goal.”