Marr Area Committee Members, meeting at Crathes this week , decided that Cala Management Limited had not justified their application for a change of use for the building from hotel to residential.

And they were opposed also to what they considered to be the scale, massing and density of the proposed new development.

The planned re-development of Victorian-era Tor na Coile Hotel, on the western outskirts of Banchory would have created 9 flats in the existing building, with a further 33 flats, in three extensions, proposed for the rear of the present hotel.

There had been considerable local opposition to the plans and the Marr Committee had deferred a decision, when the proposals first came before them last December, until they had visited the site. They also sought further information about the project, including how robustly the business had been marketed in recent years. This was in response to a view expressed by objectors - that the hotel had not been actively marketed by its current owners and allowed to run down.

A Planning Service report before the meeting on Tuesday said that the key issues in determining the application were: the loss of tourist accommodation; impact on employment; impact on the hotel building; loss of trees; roads and parking; drainage and other services.

On the issue of marketing, the report said that some of the hotel's problems in generating income could be addressed if it was marketed and suitably well-funded investors were available. But it would require "significant investment to bring it up to standard and attract a different customer base, which would secure its long-term future as an asset to local tourism."

However, if the project was given approval, it could produce a potential benefit to local shops, from having additional residents close to the town centre.

On the question of loss of employment, the report said that the hotel's 15 fulltime staff had been consulted and provided with a personal training plan to re-train at the hotel's expense. There was also the possibility of some maintenance jobs at the new project and re-employment in other tourist businesses in the area.

The report concluded that, on balance, the application be given a green light : "Whilst the loss of a local hotel is regrettable, a case has been made for its development into residential use. Other options for the site could be available, however, the decision has to be made on the basis of this proposal, not on potential scenarios, which may or may not occur."

The planners therefore recommended that final approval be delegated to the Head of Development and Building Standards, subject to almost 20 conditions being fulfilled by the developer.

But local Councillor Karen Clark, said that by giving the green light they would "lose a beautiful hotel."

She criticised the design of the proposed extensions and said they "needed to raise the bar" in terms of design, if the development was to go ahead, although she moved for refusal.

Councillor Peter Argyle backed her attack on the design saying that it might be acceptable in a city centre but not in a rural setting: "It's just not a design that fits into this site. Really it's quite horrible."

Another local Councillor Linda Clark said that the town needed flats but not in this way. She believed the hotel should be sold as a going concern.

Councillor Jill Webster said that she also would like to see the hotel keep going but said that it was a "borderline business" and that would not be easy. She backed refusal but said that the Committee had to be careful that it did not leave itself open to losing an appeal against such a decision.

Councillor Alastair Ross said they should turn down the plans down on the basis of unacceptable scale, massing and density.

Councillor Peter Argyle said they were being asked to approve the application on two issues. One was a change of use – and there was no justification for the loss of the hotel.

The second was the redevelopment of the building – and there the Committee was against the scale, massing, design and other issues involved. Members agreed refusal, on both those grounds.