The Gracewell Institute in Birmingham, a residential clinic and hostel for men convicted or accused of sexual offences against children, intends to appeal against the decision by Birmingham City Council's planning committee.
Gracewell had applied to extend the use of its main site, a terrace of three large houses in Park Road, Moseley, to include treatment and residential accommodation for 15 people 'who have turned relationships with children into abuse'.
After objections from local residents, including a petition with more than 1,600 signatures, the committee rejected planning permission on the grounds that it would have a detrimental effect on the residential character and amenity of the surrounding area.
Applications were lodged after council officials found the institute was using two sites - one for accommodation and one for treatment of 21 sex offenders - in breach of planning regulations. Treatment and therapy was being offered at the main site although it had permission only for 'residential training and research into the needs of whole family therapy'.
Emrys Jones, a senior planning official, said the use of both properties was unlawful under the Town and Country Planning Act as they were operating without planning consent. He said Gracewell would be allowed a reasonable time to find alternative accommodation.
Local concern about the safety of children living near by grew when one client absconded after being transferred to Gracewell from a a secure mental institution, and another was sent to prison after neighbours reported he was seen talking to a boy in the street, in breach of Gracewell's rules.
Last year, the council's social services department inquiry into Gracewell made several criticisms. It said: 'During the review prostitutes were regularly seen soliciting outside and near to the institute premises . . . It is somewhat incongruous for the treatment of sex offenders to be taking place in such an environment.
'The review team considers that the location of Gracewell, particularly the residential unit, in such a densely populated residential area, is raising very real anxieties for the families living in the vicinity . . .
'Even if the risks are more perceived than real, the concerns expressed by local residents are entirely understandable and the resulting impact on the daily lives of families and children in the area are quite unacceptable.'
Rodney Reed, Gracewell's director of administration and finance, said management had tried to address criticisms in the social services review. Planning permission had been sought to 'regularise' the use of the buildings. Fiona Brown, press officer, said Gracewell would complain to the local government ombudsman that the decision was borne out of bias not planning law.
Sean Wheatley, chairman of the local residents' association, said: 'We are pleased . . . that parents in the area will soon be released from the unnecessary dangers which this experiment represents.'