In a decision issued this week, Welsh environment secretary Lesley Griffiths agreed with planning inspector Declan Beggan that the proposals for the edge of the village of Llantwit Fardre should be turned down as they include building on an area of floodplain which lacked defences.
Developer Llanmoor Development submitted its outline application to Rhondda Cynon Taf council in 2014 to build the homes and a primary school on a 20-hectare greenfield site adjacent to the South Wales village.
The application was called in by ministers last year.
Beggan found that part of the site was within flood zone C2, and noted that "highly vulnerable development" such as that proposed by Llanmoor was not permitted unless justified by national or local policies.
"Planning Policy Wales and the local development plan reinforce the stance that the proposed development would not represent sustainable development due to its unjustified location within a C2 flood zone," said the inspector in his report.
"I therefore conclude that the proposed development is not acceptable in terms of flood risk."
Llanmoor said just 13 per cent of the site was in flood zone C2 and that no homes would be built on this area. The developer added that mitigation measures would ensure no part of the site would flood even in a one-in-1,000-year storm.
But Griffiths said: "I fully support the inspector’s conclusions on the flooding issue."
She added in a decision letter: "The inspector concludes none of the benefits or other matters in favour of the proposal, either individually or combined, are outweighed by the clear conflict with planning policy in terms of flooding.
"He recommends planning permission be refused… I agree with the inspector’s recommendation, for the reasons given by him, to refuse planning permission."