The centre would have had a pool, racquet courts, climbing wall and gym.
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Controversial proposals for a new sports centre at Yeovil recreation ground have been halted.
Hundreds of campaigners packed a planning meeting on Thursday night hoping to block the scheme.
South Somerset district councillors had voted in principle to support a "sports zone" for the town.
But the council rejected plans to spend £364,000 on an outline planning application to build the centre on the recreation ground's car park.
Save Yeovil Rec campaigner Ashley Strelling said: "We've now won the substantial vote of the evening and we hope that they now take that strong message on board and look for alternatives to the plans that they have.
"We hope that they back off now and leave our green spaces alone."
The "sports zone" would have included a 25m competition pool, racquets facilities, climbing wall and a gymnasium.
Council leader Tim Carroll warned that the site could be considered again at some point in the future.
"Obviously, I would've liked both recommendations to go through, but the pleasing thing is that the sports zone concept lives on in Yeovil," he said.
"This isn't the end of the process, I'm sure we will be back there actively considering a site where the sports centre should go."
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