Campaigners were celebrating victory today after multimillion-pound plans for a new Asda superstore were thrown out by an inspector.

But it was a blow for Worthing College supporters who had staked all on the retail giants paying for a new college to replace the ageing and cramped facilities.

Field Place Residents' Association led the battle to stop the superstore being built on the site of the college in Bolsover Road, Durrington.

In return, Asda would have built a modern college on playing fields next door in a deal worth £35 million.

Protesters warned the development would lead to traffic chaos in an already congested area and force small shops in the nearby Strand Parade out of business.

Rod Winter, secretary of the residents' association, said: "We are absolutely delighted. I think the college thought it was on to a surefire winner from the word go. I think they are going to have to do a lot more background work. They really haven't gone into all the other avenues of funding open to them."

Coun Keith Mercer, Conservative leader of Worthing Borough Council, said: "It is absolutely brilliant news for the people of Worthing."

Coun Bob Smytherman, leader of the Lib Dem opposition, said: "It is a victory for people power."

Asda and the college appealed to the Government after the borough council failed to consider the joint plans in the allotted time.

Last spring a public inquiry was held at Field Place, Worthing, when inspector Mary O'Rourke heard that the store would create 450 jobs. She was told Asda planned to provide almost 500 car spaces in a two-storey extension on the roof of the store.

Richard Phillips, representing Asda and the college, said at the time: "The proposal will not give rise to harmful impacts on local residents. Indeed, the community will benefit."

But Mr Winter warned the development would lead to an extra 26,656 car journeys a week. The inspector did not accept there was a need for the development and was satisfied that the store would "completely dominate" neighbouring shops. She said: "I consider the store would act like a Goliath to the existing shops in what would prove to be an unequal fight."

When told of the inspector's decision, Trevor Holmes, a butcher at J Knight family butchers in Strand Parade, said: "It's great news. There are too many of the big boys around."

Peter Corrigan, principal of the college, said: "The college is very disappointed by the inspector's decision, which means Worthing will now miss out on a huge financial investment in education and sporting facilities for its young people and the wider community."

He said the college would now consider other options for the redevelopment of facilities, which were desperately in need of renewal.

A spokeswoman for Asda said: "We are naturally disappointed at the decision.

"Throughout the time we have been working on the project we have had a lot of support from the people of Worthing people who are keen to see an Asda come to the town.

Last year Mr Corrigan warned that if the scheme did not get the green light, "ultimately we face the prospect of young people forced to leave Worthing to pursue education".

But the inspector said the college would have to go back to the drawing board.

Coun Mercer said: "There is a case for the merger of Worthing and Northbrook colleges. Both colleges have ample land to build a joint venture."