An Bord Pleanála has refused planning permission for a cable-link car ferry linking Lough Corrib's northern and southern shores in Co Galway.
The appeals board upheld objections in relation to onshore traffic, and said the applicant had submitted insufficient information on the impact on the lake's freshwater environment.
However, the outcome suggests that if link roads were improved and more environmental information submitted, there could be scope for a revised planning application.
Eight groups and individuals, including An Taisce, Friends of the Irish Environment, angling clubs and residents, had objected to the plan.
The proposed development, approved by Galway County Council, involves re-establishing an old ferry link across the narrowest part of the lake which would cut a 30-mile road journey between the Headford area of Co Galway and the Connemara border close to Moycullen.
The ferry would be similar to that operating at Windermere in England's lake district, and would take just seven minutes to cross, according to the backers,Shannon Ferry Group.
Shannon Ferry Group runs the car ferry between Killimer, Co Clare, and Tarbert, Co Kerry, short-circuiting a 137km road route around the Shannon estuary.
The Lough Corrib project involves installing a cable-system for winching the ferry across and back between Kilbeg on the lake's northeastern shore and Illaunavee/Knockferry on the southwest. The ferry would be able to take 24 cars and 120 people.
The development involves a 0.2 hectare carpark, a 114 sq m office and workshop, two new access roads, a pump house and relocation of a group water supply.
The appeals board found that the local road network linking the ferry berths was "seriously deficient" and could endanger public safety.
It was also "not satisfied" on the basis of the information supplied about the impact on fish life and on existing angling and boating activities on the lake. The project is within a candidate special area of conservation and partly within the Lough Corrib special area of protection.
It also noted that the proposed service building and carpark could adversely affect a "rich suite of orchids".
Derrick Hambleton, chair of An Taisce's Galway branch, welcomed the ruling yesterday.