The £60m Coppergate II project to extend York's Coppergate shopping complex was refused planning permission after local opposition.
Objections to the 31 161 m2 scheme focused on its height, design and proximity to ancient monument Clifford's Tower. An earlier version of the scheme was badly received last summer.
John Shannon, chair of York Civic Trust, said: "The first scheme aroused the ire of the ordinary people of York like nothing else I have seen in 30 years. The architects made only cosmetic alterations – they clearly had not taken the lesson on board.
"The buildings they have proposed are appallingly high and some of them have mock-timber frames. In the new scheme, they retain the grade II-listed Café Andros at 32 Castlegate but demean it by putting a building next to it that towers over it. They propose to knock down trees and replace them with shrubs on the top of buildings."
A spokesperson for English Heritage said: "While we continue to support, in principle, a development on this site, these proposals compromised the sense of openness around Clifford's Tower – 50 m from the centre point of the tower is too close. The character of the conservation area would be adversely affected by the height and line of the development."
Mike Stowell, project architect at Terry Farrell defended the scheme. He said: "We think the development is right for the area. We have spent a long time developing the designs and we believe it is right for the site.
"We've been working on the scheme for seven years in negotiation and design development with everyone in the area. The reaction that some people came up with, that it was over-scaled, was unexpected.
The first scheme aroused the ire of the ordinary people of York like nothing else I have seen in 30 years
John Shannon, York Civic Trust
"It is a very sensitive site in a difficult area and there is always a risk this will happen."
Client Land Securities is in talks with the planners and will make a decision on its next move soon, he said.
The scheme proposed to redevelop a surface-level car park next to Clifford's Tower and land either side of the River Foss into 24 800 m² of retail space and 105 flats.
The site is in the Eye of York conservation area, which includes York Museum, magistrates' courts and other grade I- and grade II-listed buildings.
The project provided space for a department store and an extension to an existing one. There was also provision for two more large retail outlets, 18 shop units and a multistorey car park.
The scheme was a revised version of a scheme proposing 130 flats and the demolition of a grade II-listed building at 32 Castlegate, which was rejected by planners in July 1998.
Opposition to the latest scheme was spearheaded by the York Alliance, a pressure group of local architects, artists, engineers and conservationists.
