Dublin City Councillors have voted against the disposal of a site on the city's northside which would have seen 853 homes built on it.
The Oscar Traynor Road site in Santry would have been sold to Glenveagh for €14m, despite being valued over three times that.
Under the proposal, the council would have paid Glenveagh for the social and affordable units, which would have provided 50% of the total homes at the site. The other 50% would have been privately owned homes.
Council management has warned that the decision not to proceed with the sale and development of the 17-acre site would lead to it lying idle for "at least eight years".
Councillors in the Dublin Agreement — Fianna Fáil, The Greens, Labour, and Social Democrats — however, rejected that notion and voted against the disposal.
Social Democrat TD for the area Cian O'Callaghan said that the result was "resounding" and that any future plan for the site must reflect the vote's result.
He said: “I hope this vote signals a new direction for housing policy in Dublin. The message is clear — people want to see housing that is affordable on public land.
Independent councillor Anthony Flynn said that the councillors would now make it clear to management that the site must now be fully publicly-owned.
"It sets a precedent on what we can do," he said.
"The elected council has put its foot down. We've sold the crown jewels in O'Devaney already, so we need to have a look at a new way of building housing on this site.
"It won't be [council management] that dictates what happens next. We'll go back to the local consultation groups and bring everything together. It won't take eight years. Management will be told to put together a new plan."
Labour's Allison Gilliland said that the deal did not realise the long-term potential on the site.
She said: "This approach sees us trade half the units for community amenities just because the Department does not fund the building of those amenities.
"We must draw a line in the sand and become the lead developer ourselves. Take out the middle man."
The site is the third of three strategic sites upon which development was agreed in 2017 — the other two being O'Devaney Gardens and St Michael's Estate.