Plans for the Winter Gardens site have been thrown into turmoil after councillors refused permission for the £20 million scheme.
Following five hours of heated debate on Monday night, the council's planning board rejected proposals for an arts and education centre, residential block and 176-bed student hostel.
The plans will now go to the full council for it's decision on April 17.
The planning board voted to look at the plans again after councillors heard deputations from backers of the scheme and residents who voiced their objections.
Speaking in favour, Alison Logan from the Winter Gardens Trust, said the site "deserved a landmark building."
But resident Helen Mackenzie said the five to seven storey student building was "vastly taller" than nearby properties.
"In the winter months the sun will not come above the building. It will make life unbearable for residents."
Planning officer Stephen Davies stressed that members could not approve the arts centre alone and said he was satisfied the scheme would be a "good quality development".
Cllr Barry Goldbart warned that the development would cause "enormous disturbance" to residents and hotel guests but Cllr Angela Manton described the plans as "an absolutely unique cultural fusion."
Moving that the board should reject the scheme, ward councillor John Beesley said that while the arts centre was "an iconic building," he had many concerns including traffic implications and lack of car parking provision. "The student block is wholly inappropriate, unnecessary development," he added.
Cllr Fran Ketchley supported the scheme, adding: "It is sad that students are being maligned. They add to the vitality of the town."
Speaking against the move, Cllr Roger West said: "We have a duty to future generations to ensure this centre is brought back to life."
While backing the arts centre plans, vice-chairman Ron Whittaker said: "It's our development - let's not be seen to be bending the rules."
Cllr Bill Brandwood supported the application while Cllr Chris Mayne paid tribute to the architects for "their futuristic design." However, he expressed "major concerns" over the student accommodation.
Cllr Anne Filer described the student block as "horrendous" while Cllr David Smith said the issue was "being steamrollered through because it was a council application."
Chairman Cllr Ken Mantock said the benefits of the arts centre were "very compelling," adding: "I don't believe the scheme is fundamentally bad."
The move, seconded by Cllr Beryl Baxter, was carried by six votes to five.
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules hereComments are closed on this article