Hopes to transform a "tranquil" city churchyard into a cocktail bar have been dashed by councillors.
Tipsy Jar, in Redwell Street, applied to City Hall for a licence to serve alcohol in the garden of the neighbouring St Michael at Plea church to allow for outdoor table service.
The proposals attracted strong criticism from some living nearby, who feared they would see an increase in anti-social behaviour problems in the area.
While councillors voted to refuse the licence, they encouraged the applicants to resubmit after further engagement with locals - meaning the fight may not be over yet.
Ellice Whatling, who runs Tipsy Jar alongside her wife Laura, said: "We want our guests to enjoy the summer days outdoors and don't want to create any disturbance.
"We don't attract a rowdy crowd and aren't interested in ruining anyone's lifestyle. But we believe this could have strong benefits for the city."
The St Michael at Plea church faces an increasingly uncertain future due to the imminent closure of the Revelation cafe and shop, which has been based at the site for more than a decade.
Tipsy Jar's application sought permission for 25 seats to be set up in the churchyard where alcohol could be served between 12pm and 10.30pm seven days a week.
People living in Redwell Street said they feared the plans would lead to drinkers urinating in a nearby alley and increase noise and disruption for neighbouring properties.
Larry Meek, who lives close to the church, said: "We have done our best to turn this place around and it is a very desirable place to live. But we still encounter human faeces and drug paraphernalia on a regular basis.
"These changes could tip things over the edge from unpleasant to unacceptable."
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Norwich City Council's licensing committee refused the application at a meeting on Tuesday.
Ben Price, councillor for Thorpe Hamlet, said: "This would have threatened the peace and tranquillity of the community, as well as the historical and cultural significance of the church.
"The noise impacts of this proposal would have been extremely detrimental to local residents and I welcome this decision."
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