Applicants Bloor Homes and Sandleford Farm Partnership had submitted a hybrid planning application for the scheme which included plans for up to 2,000 homes as well as retail and business space on a site south of Newbury.
It sought outline consent for the overall development and detailed consent for a 321-home first phase of the scheme.
The application was refused by West Berkshire Council’s planning committee earlier this week.
A planning report said that the proposed site site is located "within the settlement boundary adopted in the council’s Housing Site Allocations Development Plan Document (HSA DPD) and within the Sandleford Strategic Site Allocation as identified within the West Berkshire Core Strategy 2006- 2026".
However, planners recommended that the application be refused. A planning report said that the "housing supply policies of the council’s development plan provide an up-to-date framework for decision making; therefore full weight should be given to these policies for the purposes of this application".
It said that, "whilst there are material considerations in favour of the development proposed, they are not considered to outweigh the conflicts identified with the development plan and the material considerations against the development proposed".
Planners found that there were "a large number of substantial and significant disbenefits and deficiencies" that weighed against the application.
These included the "inconsistent and contradictory information provided in plans relating to strategic landscape, planting and green infrastructure"; the loss of an existing playing field at the Newbury Rugby club; "out-of-date ecology surveys"; and a "lack of information regarding the impact on the strategic road network".
The report said that "clearly the balancing exercise is conclusive".
Planners concluded that the "adverse effects of granting planning permission for the proposed development are wide ranging and numerous and are not significantly and demonstrably outweighed by the benefits of the development proposed".
West Berkshire Council's executive member for planning, Hilary Cole, said: "This is a disappointing outcome to a saga which has continued for far too long. I am saddened that the landowners have not delivered on assurances they gave us that they would work together on one cohesive plan which benefits our community.
"They have failed to demonstrate that they can work together and have failed to put forward a comprehensive plan. As such we are not in a position where we can progress with this application.
"Whilst this is a disappointing outcome we are still on track to deliver the houses needed in the district over the coming years. During the delays other applications have been approved so the housing local people need will continue to be delivered."
A statement from the council said that a separate 1,000-home application from the same developers is due to be considered by the local authority in mid-December "with a likely recommendation from planning officers that the proposal is also refused".
The applicants have been approached for comment.