A new development of 127 houses has been given approval for land behind the redundant maltings in Dereham but the maltings building itself will not be brought back into commercial use.
The application by Anglia Maltings (Holdings), who are based at Great Ryburgh, initially proposed the renovation of the grade II listed building and restarting malting operations, along with the housing.
But at Breckland Council's planning meeting the firm's chief executive David Thompson said the building would be repaired and renovated to ensure it was watertight, secure and safe but operating it would not be financially viable.
'We cannot make a commitment to reopen the maltings,' he said. 'The cost of bringing it back into production is colossal. To make things viable we would need to achieve a premium for our malt selling out of that site which is not achievable from a floor maltings.
'There is no viable return on the capital at this stage but its restoration will ensure that our options are open for the future.'
The housing was approved by a majority vote but concerns were raised about the impact of new dwellings on existing residents, particularly the height of flats proposed opposite homes on Nursery Buildings.
Speaking on behalf of residents Rebecca Cates said it was a 'piecemeal' development and said they needed to be protected or it would 'destroy our sense of identity'.
There were also concerns about having just one access onto the busy Norwich Road, using the existing roadway near the railway crossing with Chris Pearson from the Mid Norfolk Railway saying when they had to close the crossing for trains it would impact on an already busy road.
Mr Thompson said they had been unable to negotiate another access onto Greenfields Road with a neighbouring landowner.
After the meeting district councillor Alison Webb, who objected to the plans, expressed her disappointment that the maltings would not be brought back into use at the current time.
'It will be done up to be in a position ready to sell,' she said. 'It is a shame because it would have meant jobs for local people but I am not convinced it will ever be a maltings again and may be sold for flats.
'It could have been really good for Dereham.'
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