TORRIDGE District Council has quashed Bideford Town Council's plans to buy East-the-Water wharves now a decision has been made not to make the site a community asset.
The town council had put in a bid to buy the currently derelict site from Torridge in order to turn it into a public open space.
To do this they needed to get Torridge to register the site as a community asset.
But last week Torridge councillors decided to give the go-ahead to a development scheme for the site, which they have been working on since 2010.
When the decision was made it had still not been confirmed whether Torridge's corporate property manager Andrew Waite had decided the site was to become a community asset, meaning the site could not be touched for six months.
Now Mr Waite has written to the town council saying Torridge has decided not to register the site as a community asset, because the land use needs to further the social wellbeing or social interests of the community, which he said it has not.
Bideford town councillor David Brenton, who instigated the idea of the town council buying the wharves along with Councillor Peter Christie, said: "The whole point of a community asset is that firstly it is the community's, and an asset is something of value. This is what the wharves should be.
"There are lot more questions which need to be answered about what is going to happen to the wharves."
The town council is due to discuss the matter further at a meeting tonight.
Torridge has also confirmed that following the decision to develop the wharves there will be at least two days of public consultation events on the project. A date for the consultation has not yet been decided.