Wolfcraig Distillery signed a land deal with Ambassador Group last year that it hoped would have resulted in the development being located at the Craigforth Campus on the outskirts of the city.

The application included the production of whisky and other spirits, still house, workshop, enclosed yard, distillery shop, events space, cafe, restaurant, kitchen (licensed), service spaces, plant rooms, and associated 140 visitor/staff car parking spaces, coach parking, soft landscaping and infrastructure including a new access road for a site 465 metres south of Craigforth.

The building, designed by Opfer Logan Architects, was to harness the latest sustainable technologies.

However, in their decision, council planners said: “The scale and nature of the restaurant/café, event space and shop… is likely to detract from the offerings within the Stirling city centre thereby potentially exacerbating the issues the city centre faces relative to empty units, footfall and dwell time.

“The applicants state…. the distillery and the associated ancillary complimentary uses will be a tourism draw for Stirling which will attract increased footfall to the city and its city centre and not the opposite. There is insufficient information to conclude that this will be the case.

“Given the location of the facility, highly visible from the M9, the facility could attract a substantial percentage of trade from passing traffic to use the eating and retail facilities.

“The site is a sensitive location. The Craig Forth Crags have a significant geographical and historical linkage with Stirling Castle and the Wallace Monument with the three landmarks being visually read together in the landscape.

“The majority of buildings located on the Craigforth site are situated around Craigforth House at the northern end of the Crag. The proposal would be a significant intrusion into the open landscape.”

A spokesperson for Wolfcraig, who say they have already committed £2.5m to the project, said they are vowing to pursue their plans but it is understood they may have to consider other locations.

The spokesperson said: “This is a very disappointing decision; however, we remain determined to build a world class brand, whisky distillery and tourist attraction that the people of Stirling can be proud of.

“We have already committed £2.5m to the project and firmly believe that Wolfcraig will be a strong contributor to the city’s masterplan for economic development, employment and cultural advancement.

“We have been working closely with the planning department over the past eight months and we are extremely surprised by the recommendation for refusal and the reasons given are difficult to comprehend.

“There have been no objections or issues raised by legislative bodies, including Historic Environment Scotland (HES) or the Scottish Environment Protection Agency (SEPA) and we have received overwhelming support from the local community and high street businesses. The planning department’s decision has hugely impacted our project timeline and we may need to look at alternative plans to ensure we meet our production targets.

“However, the Wolfcraig team will remain committed to doing everything we can to make our vision for the distillery a reality.”

A site near Touch Farm had originally been proposed for the development.