Rick Stein's plan to build a hotel serving seafood on a picturesque clifftop had been billed as the start of a renaissance that would transform the fortunes of a Cornish town.

But yesterday, the chef's £3m vision for an innovative beach complex in Newquay met with disapproval from the local authority.

The five-storey hotel, with a striking cobalt blue fin, was dismissed by councillors as unimpressive and resembling "a glorified block of flats".

Stein, whose restaurant in the nearby Cornish village of Padstow is a favourite among upmarket holidaymakers, submitted plans for the restaurant on the privately owned Tolcarne Beach in Newquay last month, on the site of a rundown Victorian building. The development, called Project Blue Fin, would include a 42-bedroom hotel with a white façade and a blue fin wall stretching up 19m high.

There would be a bar, sea-view terraces and a restaurant selling the celebrity chef's trademark seafood. Guests at the hotel would be transported down to the restaurant on a motorised "inclinator" or in a cable car.

But Bob Irons, chairman of Newquay Town Council's planning committee, said that, while he supported the concept of Stein's hotel, he wanted the design to be altered to make it smaller and more interesting. "Originally, the plans said that as you come into Newquay, it would provide a boost for the town. But it does look like a glorified block of flats," he said. The objections will be considered by Restormel Borough Council before a final decision on planning permission is made on 26 February.

Steve Kirby, a senior planning officer, said the borough council would consider the hotel's impact on tourist accommodation and its economic benefits for regenerating the area, alongside its appearance.

Despite the reservations of the council, the project has won support from local people.

Ian Potts, Stein's architect and a director of the Architects Design Group in Plymouth, defended the aquamarine theme and said it was devised to blend with the coastal landscape: "We feel the fin fits the maritime location and it will be a strong blue colour to reflect the sea." Paul Tyler, the Liberal Democrat MP for North Cornwall, felt that judgements on project should be based on structural considerations, not on personal taste.

"To my mind, they [the local council] are expressing what can only be subjective, personal views about whether a design looks good or not. Newquay cannot claim to be a historic centre for ancient buildings. It has plenty of blocks of flats, some of which are designed well and others not," he said.

Stuart Young, a hotelier and joint chairman of Newquay Action Group, welcomed plans that he believed would attract investment to the town.

"I am a director of Hotel Bristol, very near Rick Stein's site and I feel it will bring value to the town and regeneration which is badly needed."