Don Allen had gained approval in March 2008 to build Paterson Central - a five-storey, 429-space car park with five retail shops on the site of the Birchalls car park.

He last month requested a two- year extension for the project to begin.

But the council voted against planning advice to refuse the request at its Monday meeting, with aldermen saying a better project could be developed for the site.

The council has previously had an opportunity to do what it wanted with the inner-city site - but chose instead to sell it to Mr Allen in 2006 for almost $3 million.

Yesterday, Mr Allen said he was disappointed by the council's attitude.

"Two years ago they thought this was a good development and suddenly now they don't," Mr Allen said.

"I am surprised and disappointed.

"My understanding is that there is a legal provision for a two-year extension and it would seem to me that council has acted inappropriately, if not illegally, and I will be seeking legal advice on the matter."

The Land Use Planning and Approvals Act, which councils act under for planning matters, says a once-only extension may be applied for from the date of issue of a permit.

The council has previously given other, more controversial projects, such as the old C.H. Smith redevelopment that included a skybridge, numerous planning extensions.

Mr Allen said that if he was not successful in getting the council to review its decision, he would work with the council "to achieve a development with which they are happy".

Any new designs would involve a large number of car parks because he said it was the lifeblood of small cities like Launceston.

"I have to quote businessman Don Pitt who said `parking is the oxygen of the retail sector'," Mr Allen said.