Plans for a shop, house and two flats on land in Burnham Market have been blocked by a council committee.
Developers Fisher Bullen had sought permission to renovate the Fisher and Sons site in North Street.
But their proposals were rejected by the West Norfolk Council planning committee on Thursday.
Planning officers had earlier argued that the plan did not raise any new issues compared to a similar application for the site which was passed in 2010.
However, committee members rejected their recommendations, claiming that the scheme represented an overly cramped form of development.
Parish councillors had argued that the applicants’ initial proposals would have an unacceptable impact on neighbouring properties.
However, the group did not comment on revisions to the scheme.