The £90 million, 37-storey Aurora tower in Belfast was proposed by developer McAlister Holdings and HKR Architects for Great Victoria Street, but planners have rejected the designs claiming the building does not fit in with the character of the site and surrounding area.
The decision has created a political furore, with environment minister Sammy Wilson launching a stinging attack on his own department over the refusal.
Mr Wilson described the Planning Service's decision to reject the application as nonsensical.
McAlister Holdings also slammed the decision.
Chief executive Mervyn McAlister said: "The Belfast Planning Office seems to have no regard for the economic benefits of the Aurora proposal and no understanding of the bigger picture for the regeneration of Belfast. The Aurora Building would act as catalyst for the social and economic regeneration of Great Victoria Street and Belfast’s once thriving ‘Golden Mile’."
He said the plans had been submitted to Planning Service in January 2007 after months of informal discussion.
Mr McAlister said: "We have been working with the divisional planning office for almost three years on this project and this opinion simply beggars belief. The proposal complies with every statutory requirement but it seems in the final analysis Planning Service has taken cold feet due to the height of the building.
"The fact is that the Aurora Building at 109 m is only 4.5 m taller than the Bedford Square building which was granted planning permission on Bedford Street a few hundred yards away.
"I have written to the Planning Minister and the First and Deputy First Ministers appealing to the Executive to intervene and approve this planning application. To cast aside such a major investment sends out a hugely negative message to future investors and developers looking at Belfast. It effectively says ‘Belfast is closed for business’."
Local planning consultant and a former divisional planning manager for Belfast, professor Bill Morrison, backed Mr McAlister’s call for a high level decision.
He said: "This cannot be the last word.
"The Aurora building is well-proportioned, well-detailed and elegantly finished. Every conceivable aspect has been studied in depth in accordance with the wishes of the planning authority.
"This is a development of strategic significance. It has been designed to high quality; it is not at odds with planning policy and it causes no harm in the eyes of the community. In the last analysis I expect it to be granted planning permission."
The scheme has now been transferred to the Planning Service’s management referral board for reconsideration.