There were fears an influx of people would dilute the Welsh language

Opponents feared the project could undermine the Welsh speaking community.

But supporters for the �3.8m project argued it would provide a huge economic boost to the area.

The plans had initially been given the go-ahead in principle by the Council Board, and were put before the whole council on Thursday.

Objectors cheered outside the council chamber when the result - 37 against, 23 in favour and four abstentions - was announced.

The scheme aimed to almost double the number of moorings at the marina from 400 to 700 and developers said it would lead to the creation of up to 200 jobs.

However, a draft report for the council, said that the further moorings would create only 17 jobs.

I think it's a chance lost to strengthen the economy of the Lleyn Peninsula and Pwllheli especially. Plaid President Dafydd Iwan

Hafan Pwllheli, situated on the south side of the Lleyn Peninsula, provides access to some of the best sailing waters in the UK including Cardigan Bay and has hosted a number of British, European and World sailing championships.

Welsh language campaigners had always claimed its proposed expansion would damage the language in one of its heartlands and would also make it harder for young couples to afford houses.

Last weekend, North Wales Police were called to the marina following a demonstration by members of the Welsh-language pressure group, Cymuned. Those who favour the scheme, including some of the town's Plaid Cymru councillors, said the development would bring economic benefits.

We have hope that Gwynedd Council are thinking on their feet about the future of the language in the heartlands Iwan Edgar, Pwllheli Town Council

Plaid Cymru President Dafydd Iwan - who holds the development portfolio on Gwynedd Council - supported the project but abstained in the vote "out of respect" to the majority of Gwynedd's Plaid group who opposed it.

But, he said: "I think it's a chance lost to strengthen the economy of the Lleyn Peninsula and Pwllheli especially.

"But I recognise there were challenges and risks and the scheme had become much larger than we had expected originally and that was the key question.

"I could have lived with the 150 (berths) which was put forward today but that was refused as well."

While he had had misgivings, he felt it was a risk worth taking to safeguard the local economy.

'Reasonable argument'

"There is always conflict between progress and conservation," he added.

Mr Iwan agreed that Plaid could have faced a damaging split had approval been given to the plans - which he described as "dead".

After the meeting, Iwan Edgar from Pwllheli Town Council said he was "truly pleased" the decision had been made to reject the marina.

"It shows that we have hope that Gwynedd Council are thinking on their feet about the future of the language in the heartlands that are essential to its survival," Mr Edgar said.

Gwynedd Councillor Seimon Glyn, who had fought against the plans from the start, said: "The reasonable argument has held water, and people have seen that the development would have been very detrimental to the Welsh-language communities that are left in Wales."