Surrey County Cricket Club has failed to get planning permission for a 170-bedroom hotel at the Brit Oval in Kennington, south London.
The club has proposed building a four-star hotel in partnership with Arora International, as part of the development of a 1,600 seat stand.
It hoped to complete the development in time for the 2009 Ashes contest against Australia.
However, Lambeth Council threw out the proposal following objections from the Health & Safety Executive (HSE).
The HSE warned of the risk of a major incident because of the development's proximity to the Kennington gas holder.
The decision, which Surrey plans to appeal against, follows opposition to the scheme from a small group of local residents.
By Daniel Thomas
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