Casey City Council, in Melbourne's eastern suburbs, voted down plans for a mosque at their meeting on Tuesday night.
Mayor Sam Aziz said the decision to reject the application, which was slated to include a 25m minaret, was based entirely on planning rules.
The council decreed that the excessive paving was "unsympathetic" to the landscape and scenic qualities of the area, while VicRoads objected on the basis that the development was "premature" and did not "represent sufficient orderly planning" in the area.
"It's got nothing to do with race or creed but has everything to do with the planning merits of an application that simply did not stack up with either the state planning scheme or the local planning scheme," cr Aziz said.
"I am very proud of the decision we have made."
After the vote, demonstrators led chants of "mosque yes, racism no" outside the council chambers.
Lorraine Pratley, who led a protest at the meeting, said supporters for the plan out-numbered the opponents.
"We started up a chant and we had our signs and I think we put on a really good showing," she said.
The planned facade of the mosque (Casey Council agenda) Source: Casey Council
Cr Aziz said the decision would be vigorously defended.
"It's very disappointing that having explained the planning merits of the matter and the facts that came into play - all of which relate to the planning statutes - that we still had residents, or protesters pretending to be residents, calling our decision racist," he said.
Mosque backer, the Saarban Islamic Trust, pledged to take its case to the Victorian Civil and Administrative Tribunal.
The proposed building would provide a place of worship for about 500 muslims predominantly from Pakistan and India.
This event follows protests in the Victorian city of Bendigo where the local council approved a large mosque.
