The plans, which had been submitted by developer Keepmoat, set out proposals to build a mix of flats and houses totalling 133 new homes as well as 408 square metres of new shops and a three-level public car park.
The Council's head of planning and local development had recommended that planning permission should be granted (235-page / 4.72 MB PDF) for the development. A report to the planning committee said that the traffic impact the development would cause was acceptable and that there would be no detrimental impact on the neighbouring amenities and living conditions.
However, Council leader Paul Bell said that the planning committee had rejected the plans "because of the views of the Chamber of Commerce, the Civic Society and a number people who lived nearby who objected to the size of the proposed housing" according to a report by the BBC.
"It doesn't stop the developer coming back to the council with a new scheme or going to the secretary of state to appeal against the decision," he said.
The Jackson's Lane site has also been the subject of plans by another developer. Quora Limited last year revealed plans to build a supermarket on the site along with a car park, smaller shops and business units and a care home.
"Many people will be aware a developer is talking about building a supermarket here and we're in discussions with them as well, so we will see what happens," Bell added.