Horse racing will not be returning to Lincoln's West Common after the city council rejected plans as "unsuitable".
City council leader Darren Grice told a public meeting the authority had ruled out the possibility of racing being held on the common.
Director Karen Rastall, of Lincoln Racecourse Regeneration Company, said she was shocked by the decision.
She said the firm felt "let down" adding the council should have made its position clear much sooner.
The company had asked for a 12-month lease so it could draw up a business case to return racing to the common, but it deferred its proposal last week.
Ms Rastall said the company had been having discussions with the council for two years without any indication that the council would reject the idea outright.
"We are very saddened and shocked to be told at this late stage that the council would not entertain something that is enshrined in the Commons Act - we would have expected them to make that clear," she said.
A special act of Parliament dating back to the 1980s said the common should be protected but could be used for racing.
Emile Van De Zee, of the Hands off Our Common campaign group, said he pleased at the decision and was now concentrating on the future of the common.
The project had faced vocal criticism from some nearby residents who feared it would cause traffic congestion.