The people of Middlewich have rejected its neighbourhood plan by just 22 votes.
1,085 residents voted to reject the plan, while 1,063 voted in favour.
It follows a successful campaign led by Labour town councillors calling on the people of Middlewich to turn down the plan.
Councillor Mike Hunter, Labour member of Middlewich Town Council, said: “We think that this is a fantastic result for Middlewich and its residents.
“There were too many open-ended issues within this plan which would have been bad for our town.
“The residents have made a choice and that choice is to ensure that more of the electorate are involved in rewriting this plan.”
Middlewich now follows in the footsteps of Swanwick, in Derbyshire, and Thornton, in Hull, by rejecting the document at referendum.
If approved, the plan would have been given significant weight by Cheshire East Council and the Planning Inspectorate when future planning applications were considered.
It would have set guidelines on what type of development could take place across Middlewich and helped the town fight against speculative developments.
But ‘no’ campaigners insisted the plan was not good enough and that residents had not been consulted well enough – and now town chiefs will go back to the drawing board.
Cllr Hunter added: “The hard work starts now. We will be asking for residents to get involved in a new neighbourhood plan forum.
“We take no pleasure from the fact that four years and thousands of pounds have been wasted on a plan that was never fit for purpose.”
In a statement following the announcement, the neighbourhood plan steering group said: “It is a disappointing result given the four years of hard voluntary work people and some councillors have put in.
“It is disappointing that the Labour town councillors chose not to get involved.
“Instead they resorted to negative campaigning right at the very end and made it into a politically motivated bun fight – when they should have been working to develop a plan to protect Middlewich from speculative developments.
“At one point Labour said it was 85 per cent OK, so why didn’t they accept the plan and work to modify the bit they didn’t like once agreed – which planning law allows?
“Middlewich is now left open to any speculative development and the Middlewich voice will not be given any weight in any planning decisions because we have no neighbourhood plan.
The votes were recounted after the result was first announced – with the winning margin being just 22.
The turnout for the referendum was 18.91 per cent.
Meanwhile, Knutsford residents voted overwhelmingly to approve their neighbourhood plan – with 1,744 votes for it and 349 against.
The turnout for Knutsford’s referendum was 19.97 per cent – with both counts taking place at CEC’s Westfields headquarters, in Sandbach.