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A planned "mega mosque" next door to the Olympic Stadium in Stratford, east London, has been refused planning permission.
Newham Council rejected an application from a group called Talighi Jamaat to build a house of worship that would be three times larger than St Paul's Cathedral.
Planning officers in the Olympic host borough advised councillors on the planning committee to say no.
If successful, the plan would have seen a 9,000-capacity mosque erected on the six-hectare Abbey Mills site in West Ham.
With four times the capacity of St Paul's Cathedral, it would rank among the largest Muslim centres in Europe. It would also contain a segregated area for up 2,000 women.
Supporters said that the 90,000 Muslims who live in Newham require a larger space in which to worship. Opponents claimed the building would create a ghetto in the heart of the community.
Reports have linked the group behind the application with radicalising young Muslims but Talighi Jamaat denied it was a fundamentalist sect.
Demonstrators from Bradford and Birmingham gathered outside the town hall in support of the application.
The decision was the latest stage in a long fight by the group to build the mosque since it bought the wasteland site in 1996.
During the consultancy period it was revealed that more than 25,000 letters supporting the application were received by Newham Council. It later emerged that only one percent of them were from people living in the borough,
Newham Council's executive member for regeneration and strategic planning, Cllr Conor McAuley, said: "The proposed mosque building is too big and would have an impact on important historic buildings nearby.
"The council undertook a rigorous and extensive consultation about the proposals in the run-up to this decision.
"Our planning policies promote the development of the Abbey Mills site for a mix of residential, employment and community uses, to help create a new local centre near West Ham station and regenerate the area."
Campaigner Ala Uddin Ahmed told the BBC: "There are 90,000 Muslims around the borough. The Muslim community is growing and there is need for a bigger [place of] worship.
"We are extremely let down. We think it is unjust because of the demand of the local people and the Muslim community."