A controversial proposal to build a five-storey 83-bedroom hotel in Cashel, Co Tipperary, has been rejected by An Bord Pleanála.

The development led to a row involving the Presentation Order of nuns, which formerly owned the land, the town council and local residents over whether the land should be used as a town park.

The campaign against the hotel garnered national attention because the nuns stated publicly that they sold land to the town council in 2001 on the assurance it would be turned into a public park.

The council claims no such assurance was given, and argues the later sale of the land, for a profit of €1.5m, was to ensure a badly-needed hotel would be located in the heritage town.

In its ruling today, An Bord Pleanála cited three reasons for refusing planning permission - including that the proposed hotel and offices were an 'inappropriate type and form of development'.

It is not known whether the developers, CMS Developments of Clonmel, will try to submit a revised plan for a hotel.

Local campaigners have vowed to maintain the fight for a town park and make it a local election issue.