Long-term regeneration plans for the Medway area have suffered a setback.
The river is at the heart of plans to create a city in Medway
A government inspector appointed to examine the council's area development blueprint said it was "unsound" and halted the planning process.
Medway council will now have to withdraw its £1m document, re-think future proposals for housing and jobs, and then hold a further inquiry.
The authority said the decision would not affect any regeneration plans that were currently under way.
Its core strategy document, which outlined where the council wanted to site 16,000 homes over the next 14 years, could now be held up for nine months.
The inspector voiced concerns over whether the blueprint identified enough space for economic development
The authority said its blueprint followed government guidelines.
Leader of Medway Council, Councillor Rodney Chambers, said: "GOSE [Government Office for the South East] has supported us over our employment and housing allocation.
"We will not release any more greenfield land over and above what we have already identified and extensively consulted on."
He added: "We are not prepared to let the people of Medway down by releasing further land and will keep our promise that we will never develop Capstone Valley.
"We will seek to speedily bring this to a conclusion by resubmitting our plans at the earliest date possible.
"We have been seeking to deliver quality jobs and homes and regenerate Medway."