The investment of £1.6 million at a Fife beach has been rejected amid fears views from the Old Course would be damaged.
A building described as “iconic” and “radical” would have housed a visitor centre, new caf and toilets on the West Sands in St Andrews.
A new lifeguard station, recreational area and boardwalk were also to be created.
Fife Coast and Countryside Trust was denied planning consent for its ambitious development, however, resulting in the loss of cash promised from several sources, including £1.3m from the Coastal Communities Fund.
Chief executive Amanda McFarlane and Tom Morton, the architect behind the design deemed unacceptable, hit out at councillors.
They were blamed for turning down the opportunity to replace “third-world facilities” for the public in favour of the “golfing elite”.
Mr Morton said: “This decision means that St Andrews is destined for the foreseeable future to have extensive luxury facilities for the golfing elite looking out over decrepit, third-world facilities for the general public.”
The 32ft building was designed to look like overlapping waves or dunes.
St Andrews Links Trust, which manages the town’s golf courses, claimed its lack of historic character was inappropriate.
Chief executive officer Euan Loudon said: “Aspects of this development have the potential to damage the authenticity and reputation of the golf course experience.”
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