By Peter Henley BBC South politics correspondent

The year-long public inquiry into the plans ended in December

The plan was for a major expansion of Southampton docks, doubling its size.

The chosen site was open fields on the edge of the New Forest.

The environmentalists appear to have won the argument against, with the government backing the inspector's refusal of the plan.

It was a battle between big business, keen to import more cheap goods from abroad, and a coalition of environmental campaigners and local residents.

It will create problems for Southampton. We undoubtedly need the expansion in facilities Gwyneth Dunwoody

Labour MPs from the city of Southampton, backed by government policy, were on one side.

On the other side were opposition Conservatives representing the rural and ancient New Forest.

The MP for the New Forest, Julian Lewis, has described this decision as "an amazing victory of David over Goliath. A slap in the face for the big boys and the get-rich-quick merchants who bullied and blustered that the development was inevitable".

But that doesn't tell the whole story. In the end the decision was made by an inspector who carefully weighed the evidence in a year-long inquiry and tried to balance the interests of all.

'No national strategy'

In his report he says: "There is no simple or clear-cut answer, in the end it is the value judgements of the government that must decide the issue."

But his report left ministers in no doubt about what they had to do.

They felt they had no option but to support the case against development.

Labour MP John Denham, who says the decision is a blow for employment in the Southampton area, claims the inspector's conclusions were "strongly against the scheme".

He said: "It is now essential to do everything possible to support the port and tackle congestion problems."

But it is not just Southampton that needs support.

Protesters turned out in force against the plan

There is no national port strategy - despite clear calls for one.

The Transport Select Committee report was unequivocal last year.

And chair Gwyneth Dunwoody says she was surprised at this decision.

She said: "It will create problems for Southampton. We undoubtedly need the expansion in facilities."

She argues that it leaves huge questions about how we can operate a global economy without a national strategy for this sort of infrastructure.

But take note. This one of the last inquiries of its type. The government has a new plan for public inquiries that will see Whitehall wielding more influence.

Goliath is striking back.