Taylor Woodrow - now Taylor Wimpey - and BAE Systems proposed 1,000 houses in Cat and Kittens Lane in Featherstone, while Persimmon Homes wanted to build 360 at Brookhouse Lane to the south. Landowner Nigel Roberts appealed against the council's decision to refuse permission for 560 homes at Campions Wood in Cheslyn Hay.
Following a public inquiry, communities secretary Hazel Blears has refused planning permission on the grounds that the homes were to be built on green belt land and the emerging West Midlands regional spatial strategy (RSS) looks to urban regeneration to fulfil its targets.
South Staffordshire Council director of strategic and planning services Andrew Johnson said: "The RSS sets a target of 3,500 houses between 2006 and 2026, which works out as 175 per year. Even the appellants recognise that we already have a five-and-a-half-year supply, although we think that it is closer to nine years."
Council leader Brian Edwards said the decision supports the preservation of local green belt and the RSS focus on brownfield sites.
Persimmon West Midlands managing director Dominic Harman said the firm will consider its options. "We are naturally disappointed that the secretary of state has refused our long-negotiated planning application at Featherstone."