A consortium of developers had hoped to build 450 luxury lodges, an indoor water park and a leisure complex on the dormant 576-acre site.

Initially unveiled in 2014, phase one of the development on the outskirts of Galston was set to create a brand new Loudoun distillery, around 1,000 new energy efficient homes, a renovated and stabilised castle building and a plan for the conversion of the castle itself into a 4/5 star hotel.

The plans were rejected by the local authority after council planners said there was not enough information before them to justify giving the proposals the green light.

A Scottish Government reporter has supported the move, agreeing the plans were “unacceptable” in their present form.

Ministers said on Wednesday they agreed with the reporter’s recommendation.

In a decision letter to planning consultants RPS Group, who are part of the Loudoun Castle Project consortium, ministers said the development did not meet East Ayrshire’s planning policy.

It said there was “no certainty” that the housing plans would allow for the castle itself to be safely restored.

The letter also said that proposed housing would have an “adverse impact” on the Loudoun Castle grounds.

It concluded: “Furthermore, the scale of the proposed enabling housing development, and lack of suitable masterplanning mean in their present form the proposals would not result in a well planned sustainable community.”

Ministers also backed the rejection of a partial expenses claim made by Loudoun Woods Homes Ltd against East Ayrshire Council.

Welcoming the decision, Michael Keane, head of planning and economic development, told the BBC: “Our position has always been that priority should be given to the development of the tourist attraction supplemented with the minimum enabling housing development to facilitate the restoration of the castle facade.

“However, as the ministers have confirmed, the applicant proposals did not deliver this strategy and their proposals separated the tourism development from the housing development, giving rise to uncertainty over the minimum enabling housing development necessary to make the castle safe, while the housing development promoted an adverse impact on the Loudoun Castle Historic Garden and Designed Landscape. 

“It is now for the applicants to consider their position and decide if they wish to bring forward proposals for an alternative development scheme for the site which would align with the ministers decision and the council’s aspirations for the site.”

Developers can appeal against the decision at the Court of Session within six weeks.