Minister Garrett’s decision came as a shock after his own department had ruled in favour of the redevelopment, sighting the proposal’s social and economic benefits outweighed any negative impacts on the heritage values of the lighthouse.

Despite the disappointment of many there is still a glimmer of hope that the redevelopment may be given the green light.

Due to the considerable public interest in the site the minister announced a 10-day period of comment where he will seek the public’s opinion on his decision to refuse the redevelopment proposal.

Many locals hope to use this period to change the minister’s decision, including the Newcastle Trades Hall Council secretary Gary Kennedy, who said they were amazed by the planned rejection and vowed to fight on.

“We are going to send another letter to the minister outlining again why we think this development is in the interest of the community.”

After the public has been denied access to the site for the past 150 years Mr Kennedy said the proposal by local businessman Neil Slater to redevelop it as a tourist attraction, equipped with an accommodation, restaurant, viewing platform and kiosk, was the only viable way to ensure public access to the lighthouse.

“The Port Corporation (the owners of the site) is not going to spend to money to make it safe to go up to the site, where Neil is willing to spend the money to make it safe for everyone to go up there.”

Much of the debate about the plan has focused on the impact the redevelopment will have on the site’s heritage values, which Mr Kennedy said would be minimal and would be placed in greater risk if the proposal was not approved.

“It this proposal does not go through, it will be the end of the lighthouse; I can not see anyone else willing to go through with it.”

Mr Kennedy said the decision was also a major set back to the city’s tourism industry.

“The east end of Newcastle could become a great tourist attraction; we could have the lighthouse and Fort Scratchley to work alongside the Maritime Museum and The Regional Museum, which is moving into that part of town.”

The proponent of the redevelopment of the site Neil Slater said he was ‘mystified’ by minister Garrett’s planned rejection of the redevelopment but said he had not given up hope and was urgently seeking to make contact with him.

“I think we can still get it through but we need to start dialogue with the minister.”