Dover District Council’s planning committee granted planning permission for the scheme at a meeting in December 2014.
The plans comprise a 130-bed hotel and conference centre, residential units and a museum/visitor attraction at Dover’s Western Heights, as well as 521 homes, a retirement village and a health facility at Farthingloe.
The Kent branch of the Campaign to Protect Rural England (CPRE) challenged the approval at the High Court, claiming that the scheme amounted to "development on an unprecedented scale" in a designated area of outstanding natural beauty.
During the case, CPRE said that the housing scheme would be harmful to the Kent Downs area of outstanding natural beauty (AONB).
While not opposed to the principle of housing development in the district, and while in favour of the proposed improvements of heritage assets, it claimed that the scale of the plans at Farthingloe were unjustified.
It claimed that the council’s consideration of the harm caused was "seriously flawed", and involved a misapplication of national policy on AONBs.
But yesterday, High Court judge Mr Justice Mitting dismissed CPRE’s challenge.
The judge ruled that Dover District Council did not make any errors when it approved the plans and he dismissed all four legal grounds put forward by CPRE’s legal team in their challenge. The ruling followed two days of legal argument.
In a statement, CPRE said it was now "considering its options".
Director Dr Hilary Newport said: "We are utterly dismayed and disappointed at the judgement. It is vital that we protect Areas of Outstanding Natural Beauty for future generations and to allow this intensive building at Farthingloe makes a mockery of the whole planning system which is supposed to provide the highest level of protection for AONBs.
"The reality, when tested through the courts, is that it has failed to protect the AONB."
R on the Application of the Campaign to Protect Rural England (Kent Branch) v Dover District Council. Case Number: CO/2290/2015