Proposals for 81 flats beside the Caledonian Canal, on the outskirts of Inverness, have been thrown out by councillors.
City architects Archial were given the go-ahead for the flats at Torvean four years ago, subject to the completion of a legal agreement concerning affordable housing.
The six blocks of flats were designed to be between three and five storeys high, replacing the Torvean Caravan Park and adjoining closed petrol station.
But five years on, the agreement, known as a section 75, remains unsigned.
Under Highland Council’s policies, firms are asked to give a quarter of their developments to affordable housing.
In the Torvean case, that would have represented 20 properties.
However, planning officer Nicola Drummond told the south planning applications committee yesterday that the land in question had changed hands and the new owners were not interested in pursuing the development.
She added that they were unwilling to proceed with the section 75 agreement.
Meanwhile, councillors have approved plans to convert a holiday home into a house of multiple occupation (HMO), despite seven objections from local residents concerned about noise and loss of amenity.
The Highland Homeless Trust will house up to six people in the property at 35 Glenurquhart Road. A warden will live at the house around the clock.
The company must also seek an HMO licence for the property before offering accommodation.
Councillor Donnie Kerr, Inverness Central, asked for a condition to be imposed to ensure that CCTV was installed at the house.
He also wanted a fence to be erected at the rear of the building to mark the boundary between it and a property to the rear.
However, it was agreed that these issues would be dealt with by planning officials and local ward members.