A travellers' site has existed near Cottenham for more than 40 years
A group of travellers illegally camped on a rural site have lost an appeal against eviction.
The Deputy Prime Minister's office, which has been under fire in the media over Gypsy camps, said the group must leave within the next three months.
The decision on Smithy Fen, Cottenham, Cambs, upholds an enforcement notice issued by the council last September.
South Cambs District Council leader Daphne Spink called for clearer government policy on illegal camps.
A travellers' site has existed near Cottenham for more than 40 years.
But planning officers turned down a request for retrospective planning permission for 13 families who had set up home on 18 plots at the site four years ago.
In November, travellers' won the right to challenge the eviction. But on Friday the government upheld the council's initial decision.
About 1,000 local residents had threatened to withhold their council tax if action was not taken to reduce the size of the 11-acre camp, which they claim has spiralled since 2003.
A spokesman for the Office of the Deputy Prime Minister, John Prescott, said: "The planning inspector agreed that planning permission should not be granted, so the families will now have three months to leave the site.
'Common sense' decision
"If they fail to move, the local authority will go to court to seek orders for their eviction."
The planning inquiry claimed granting permission would diminish the rural character of the area and be in conflict with regulations for countryside development.
Lawyers acting for the travelling families told the inquiry they were furniture dealers and needed a base at the site to be close to their suppliers.
Mrs Spink said common sense had prevailed, but called for "clear and more coordinated" government policies on dealing with illegal camps.
She added: "There should be a duty on all local authorities to make provision for travellers, so that a few districts - who are currently having to take on more than their fair share - are not overloaded."
A second public inquiry into the authority's efforts to evict travellers from a further 22 plots at the camp is due to be held in the summer.