Sixty people living on boats near London's Tower Bridge have failed to get their homes legitimised.
There are 30 barges moored near Tower Bridge
Southwark Council refused to give boat dwellers permission to reside permanently at the Downings Roads Moorings, at a meeting on Wednesday.
The 30 barges have been moored illegally and locals have complained about noise and disturbance.
But the group fighting to stay there has collected a 2,000 signature petition.
A public inquiry into attempts to evict the boat dwellers was adjourned in March, while the council ruled on whether to legitimise the moorings for residential use.
When proceedings resume on 5 July, an appeal against Wednesday's decision is expected to be heard at the same time.
The group fighting to stay has won the support of local MP and London mayoral candidate Simon Hughes, among others.
Resident Anne Wainwright said: "We are fighting for our homes and the continuance of a unique and vibrant community."
Council leader Nick Stanton acknowledged feelings had been "running high".
But he said: "We are not, and never have been, against boats on the river.
"Commercial moorings at Downings Road have existed for more than 150 years and we have no plans to stop that.
"But the planning committee felt that establishing a permanent residential use on this part of the river was inappropriate."
Permission was denied on various grounds including the impact on a conservation area, noise disturbance and loss of privacy.