The House of Lords refused to overturn planning permission for the Bluestone scheme near Narberth. The theme park proposal includes a water park, timber lodges, a sports park and snow centre. Backers claim that it will create 900 jobs.
But opponents, led by the Council for National Parks (CNP), argue that the development will cause irreparable damage to the Pembrokeshire Coast National Park, within whose boundary part of it falls, and create a dangerous precedent.
The CNP had taken its fight against the scheme to the law lords, but last week a committee refused permission to appeal. Chairwoman Kate Ashbrook said: "This major holiday village will cause tremendous damage to the national park. We have convened an urgent meeting of our legal advisers to consider the implications of this decision."
But the Welsh Assembly Government welcomed the news. Andrew Davies, minister for economic development and transport, said: "The Bluestone project is an ambitious, high-quality development that will complement the wealth of tourism attractions across Pembrokeshire."
The assembly, which has pledged a £16.5 million support package for the scheme, claims it will deliver long-term benefits.