The Marina Isla de Valdecañas resort lies on an island in a reservoir near Cáceres in the western Extremadura region.

More than €100 million has been invested since 2007 to create a hotel, 18-hole golf course, sports facilities and 185 villas on the 330-acre site.

Several courts have ruled against both the project and the legality of a “special interest” status attached to the resort by Extremadura’s regional government in an attempt to prevent the complex from being bulldozed. In 2020, Extramadura’s Supreme Court said that it was “materially impossible” to demolish the property as the work would cost about €34m (£28.7m) and more than €100m would have to be paid out to owners in compensation.

This week, Spain’s Supreme Court sided with environmental groups and ordered Extremadura to demolish the buildings in the EU conservation area.

Ecologists in Action, a campaign group, said: “This ruling averts a dangerous precedent in the use of tricks to avoid executing demolition orders on projects that are clearly illegal.”

Extremadura’s regional government has suggested the authority could appeal the decision at the constitutional court. Demolitions of illegal buildings are rare in Spain, even when courts have ordered in the bulldozers.