BUSINESS leaders have warned that Oxford’s economic future will be damaged by the “short-sighted” council decision to throw out the multi-million-pound redevelopment of Oxford Brookes University.

But while the business community expressed astonishment at the city council rejection of the £150m scheme to modernise Brookes, triumphant resident groups were launching a new campaign to stop what they say is the student “colonisation” of Headington and other parts of the city.

Students are being blamed for bringing about “the disintegration” of local communities by residents’ groups that came together to fight the Brookes plan. And last night they proposed an action plan to stop the spread of student “ghettos and enclaves” that they say have left residents feeling alienated.

A resolution was last night due to be put to a public meeting organised by eight Headington and East Oxford residents’ associations, calling for the city and county councils, both universities and Oxfordshire Primary Care Trust to form a group to address the issue of the “studentification” of large areas of the city.

Residents who had opposed the Brookes plan to replace buildings with a new ‘gateway to Oxford’ said they were shocked and delighted by the 20-13 Oxford city council vote to reject the scheme.

The application was called in to the full council by the Lib Dem group leader David Rundle after it had been backed by the council’s strategic planning committee and council planning officers.

But it has emerged that ten of the 16 Lib Dem councillors at the town hall, including Mr Rundle, did not turn up to the critical vote.

Oxfordshire Economic Partnership chief executive David Doughty said he believed Brookes had been “let down”.

He said: “Oxford’s two universities are a major asset, not only in equipping our future work force but attracting investment from companies wishing to relocate to Oxfordshire. They are of great value to the economy. It was short-sighted not to appreciate this and take the opportunity to have a modern Brookes.”

Keith Slater, a board member of Oxfordshie Chamber of Commerce, said: “ It is very disappointing. The plans were of such great importance to the development of both the university and the city.

“The development of Brookes over the last two decades has had a major impact on the city in terms of the diversity of students brought into the city, the economic benefits brought by the increased student population and the heritage from many of the Brookes graduates remaining in the locality and increasing the skills base.”

Keith Mitchell, the leader of Oxfordshire Council, said: “I thought the plans were very exciting. The particular issue that caused the problem involved three properties on one side of the site.

“I think it is sad that a big and important scheme has not got permission. I have no doubt Brookes will come back and try again, and I hope that they are successful.”

Oxford Brookes has declined to say whether it will appeal.

Lib Dem councillor Jim Campbell, who missed the vote because he was on holiday, said: “It was unfortunate such a critical decision was taken at a meeting at which there was just ten days’ notice at most.”

East Oxford and Headington residents last night insisted the council needed to address the wider issue of students ‘taking over’ entire residential areas.

One of the organisers of last night’s public meeting at All Saints Church, Dr Sietske Boeles, said: “The issue of student ghettos needs to be tackled, perhaps with the creation of ‘areas of restraint’.

“We need to find ways to stop the social disintegration caused by high student numbers. Research shows it can lead to mental health problems because residents can end up feeling isolated and excluded from their communities.”