The Scouts will not be getting a new home or a full-time group leader after town hall planning chiefs blocked a housing scheme tied to their future.

A proposal to build seven storeys of housing on Scout-owned land in Holloway Road, Holloway, was rejected by Islington Council’s planning committee on Tuesday night.

The Holloway troop stood to get a brand new base on the site and �950,000 investment in its youth work – to fund a leader to work with 200 volunteers across the borough for many years to come – in return for giving up the land to developers.

But on Tuesday night councillors on the planning committee rejected the scheme because it included 10 units of affordable housing rather than 11, which they believe could be built if the developer does not have to hand over such a large sum to the Scouts.

Brian Hosier, Islington Scouts district chairman, said: “We’re terribly disappointed.

“We didn’t think the council would take this view and I doubt it will go ahead at all now.”

The scheme, which would include 24 private units, has been in the planning for nine years and was recommended by the council’s planning officers. The Scouts would have given up the centre for community use by the council during the day.

The decision could now mean no affordable housing is built at all – as the Scouts have already said they will not go ahead with any scheme if they do not get money for a full-time leader, and will simply refurbish the centre they currently use on the site.

Cllr George Allan, one of the Lib Dem committee members who supported the plan, said: “Labour have cut off their nose to spite their face.

“They have secured precisely zero social housing from this scheme and it’s quite likely the developer will walk away, or the Scouts will just go back and carry on as they were. It was a shocking and dreadful outcome.”

Cllr Martin Klute, one of the Labour councillors who voted down the scheme, said: “A full-time leader is nice to have, but the district valuer’s report makes it clear that money could be put towards more affordable housing.”