The scheme to build "wonky homes" faced serious public opposition were rejected by planners and at an appeal.

"It is obvious people in Hebden Bridge don't want what was being proposed so we need to start again with a clean sheet of paper," said Calderdale Council leader Stephen Baines.

The council's regeneration spokeswoman Amanda Byrne said the council was under no obligation to deal any further with Hebden Royd Development LLP which was chosen to building homes and multi-storey car park on the site.

"There is no legal reason to continue with the scheme," said Coun Byrne (Con, Sowerby Bridge).

But Philip Bintliff, for architects Studio BAAD, has urged everyone involved to carefully read the planning inspector's decision.

"An experienced architect and planner, he supported it in every respect save for two.

"We welcome the support he gave our architecture, alongside that which we previously received from council planners, English Heritage, CABE and members of the community."

He said the inspector could not grant the appeal with conditions, so he had to dismiss it.

"But the minor points he referred to provide a clear direction and we welcome them – the height can be modified very simply," said Mr Bintliff.

The inspector, Roger Brown, said two of the six blocks of apartments, rising up to seven stories high, would be visually dominant and harmful to the character and ambience of the area.

It was planned to build 24 houses, 24 flats, 16 new business premises and an underground car park at a total cost of £10 million.

Liberal Democrat group leader Janet Battye (Calder) said she would ask the council to end the development agreement.

"Then there should be open consultation about what should happen next", she said.