Hillside Parks Limited pointed to a planning permission granted more than 50 years ago in claiming the right to build 401 homes at Balkan Hill, Aberdyfi.
The permission was granted in 1967 by Merioneth County Council, a local authority which ceased to exist in the 1970s.
The Snowdonia National Park Authority has fought the development and last week finally triumphed at the High Court in London.
Judge Andrew Keyser QC ruled that, after so many years, it is now physically impossible to lawfully implement the 1967 planning permission.
The permission gave the land's then owner consent to build "clusters of residential dwellings" overlooking the scenic coastal town.
Hillside Parks only acquired the site in 1997, but claimed that the permission granted 30 years earlier remained fully extant.
It pointed out that, in 1987, a judge declared the permission lawfully granted, that it had been started and that it could be completed "at any time in the future".
A total of 41 homes have been built on the site over the years and six more were under construction when the development was put on hold pending the outcome of the High Court case.
Ruling on the dispute, Judge Keyser said the original 1967 "master plan" had been modified by numerous additional planning permission granted since.
The 1967 permission was for construction of a "housing estate" and the buildings already constructed on the site were "materially inconsistent" with the master plan.
He added: "Development would only be authorised by the January 1967 permission if it were carried out fully in accordance with that permission.
"Deviation in any material respect from the master plan would mean that the January 1967 permission provided no legal authority for any part of the development shown on the master plan."
He added that, on the face of it, completion of the development would "necessarily involve an unlawful departure" from the 1967 permission.
The 1987 court order had been overtaken by events on the ground and did not mean that the development was "necessarily capable of lawful completion in perpetuity."
The judge said: "The development permitted by the January 1967 permission cannot now be completed lawfully in accordance with that permission.
"It is physically impossible to complete the development fully in accordance with the January 1967 permission.
"This is not a matter of minor deviations from the detail of the master plan."
He concluded that any further development of the site would require approval of designs by the authority - and fresh planning permission.
Hillside Parks Limited v Snowdonia National Park Authority. Case Number: F90CF015