A security fence put up at an historic boatyard in Oxford to keep out intruders will have to come down after planning permission was refused.
The boatyard has serviced boats in Oxford for about 160 years
Campaigners trying to save the Castle Mill site from housing developers had been living there until May, despite a court order to move them on.
Oxford City Council said on Tuesday the fence must come down due to its visual effect and its impact on residents.
British Waterways, which is selling the land, hopes to reach a compromise.
The site at Castle Mill, in Jericho, had previously been protected by a security barrier on one side, but a higher fence was put in after the campaigners were evicted in May.
The company is permitted to protect the boatyard using a fence of up to 2m (6.6ft) high, but the new installation exceeds this by 0.4m (1.3ft) and also has razor wire on top.
Emmett Schlueter, who lives nearby, told BBC News: "We take it as a bona fide victory. It is not a conclusion, the work is yet to be done, but it certainly is a victory.
"It's horrible to look over our back garden and see this razor wire, it looks like a concentration camp, we no longer have any view of the canal or the boats on the canal."
A spokesman for British Waterways said the company was disappointed with the decision.
Eugene Baston told BBC News: "Clearly we are sorry it's come to this, but site security remains paramount to us.
"Should the site be reoccupied, further public moneys would be wasted on a future eviction that could be invested in improving the canal work."