Castle Park school in Dalkey, Co Dublin has got the thumbs down for a controversial residential development in its grounds.

An Bord Pleanála has ruled against the development of 81 townhouses and apartments on the 2.5-acre site. The proposal was to spread the development over eight blocks which would rise to seven storeys.

This overturns a decision by Dún Laoghaire Rathdown County Council to grant planning permission for the scheme.

This refusal may jeopardise the deal the fee-paying school is believed to have struck with a consortium of developers led by David Arnold that the site would be sold to them for a figure in the region of €10 million subject to planning permission being granted.

The proceeds were to contribute towards a redevelopment of the school which would involve new teaching and sporting facilities.

Seven residents groups and individuals appealed the scheme to An Bord Pleanála.

The planning board agreed with them that the height, layout and scale of the development would injure the existing character of residential amenity on Hyde Road, Castle Close and Castlelands and would be contrary to the zoning of the area which is to protect and improve residential amenity.

It said the loss of mature trees on site would result in a significant feature in the local landscape being removed.

Also in Dalkey, Wesley Curran's Otranto Properties has been granted planning permission for a residential development in the grounds of Santa Maria on Cunningham Road.

Otranto paid €10 million last year for the house and has been granted planning permission by Dún Laoghaire Rathdown County Council to build 24 houses and apartments on a 1.45-acre portion of the two-acre grounds of the protected Victorian house.

However, among the conditions of planning permission, Dún Laoghaire Rathdown County Council has stipulated that the developer has to comply with Part V of the Planning and Development Act 2000, which can require a percentage of the development to be set aside for social and affordable housing, and says that agreement has to be reached with the county council housing department "unless the developer shall have applied for and been granted an exemption certificate under Section 97 of the Planning and Development Act, 2000, as amended".

The mix of residential units comprises five terraced mews houses, 10 detached houses and nine apartments. There will also be 45 car-parking spaces, of which 38 are underground.

In March, Otranto got planning permission to convert the coach-house adjoining Santa Maria.

The coach-house is to be turned into a 168sq m (1,808sq ft) two-bed dwelling with a study. Santa Maria is on an elevated site which has sea views and is within walking distance of Dalkey village.

Hugh Leonard's father worked as a gardener on the estate which was formerly known as Enderly and owned by the Jacobs, a prominent Quaker family.

Couturier Marjorie Boland bought it after the second World War and changed the name to Santa Maria. It was bought by the Kennedy family in 1958.

Santa Maria is one of a number of large houses in the area that have been snapped up by developers as residential sites.

Many have proven controversial with locals who see these infill developments as encroachment on the area.