A major green energy scheme planned for the north Norfolk coast has been dealt a second hefty blow after councillors rejected plans to bury miles of power cables through the countryside.

An application to lay 28km of cabling to power the 168-turbine Dudgeon wind farm off the coast at Cromer was unexpectedly thrown out by North Norfolk District Council (NNDC), meaning the project could now suffer delays.

Applicants Warwick Energy are already facing a high court battle to push through proposals to build a sub-station further inland at Little Dunham, which would provide the farm's link to the National Grid, after plans to build the structure were turned down in 2010.

And the green energy firm is now preparing for another appeal after planning committee councillors rejected its plans to bury cables from Weybourne to Great Ryburgh at a meeting yesterday – despite NNDC officers recommending they be passed.

In the initial vote, three councillors voted for the scheme to be approved and nine against. A second poll then saw seven votes in favour of refusing the plans and five against.

The plans were turned down on landscape and agricultural economy grounds, amid claims the work to lay the cables – and the damage they would leave once installed – would damage the rural north Norfolk countryside.

In response, Nick Medic, director at energy trade association Renewable UK, said: 'This unexpected decision will have a negative impact on Norfolk's ability to attract investment. A project of this type creates thousands of local jobs and pumps millions of pounds into the local economy, while leaving virtually no impact on the countryside.

'Refusing a buried cable proposal on landscape grounds simply isn't logical, particularly as Norfolk has so much to offer in terms of natural renewable energy resources.'

Objectors said the cable proposal was an 'Alice In Wonderland' application as permission has not been given for the construction of the turbines or the sub-station.

But those in favour of the scheme, which has been given permission to lay 17km of cables in the Breckland district, said it should not be held up 'indefinitely'.

Benji Cabbell-Manners, who proposed the cable works be approved, said: 'Can you imagine if we were faced with a planning permission to have overhead wires everywhere? It would be simply awful.'

North Norfolk MP Norman Lamb said he was 'concerned' by Dudgeon's setback as he thought the project –which has been on the cards since 2010 – was important for generating much-needed renewable energy and creating jobs.

'For a planning application to take so long to get to a decision causes a very real concern to a project of this sort so we need to get to a solution quickly,' he added.

Mark Petterson, project director at Warwick Energy, said the firm would appeal against NNDC's decision while fighting its Little Dunham plans and at the same time put in a new application for the sub-station to be built in the neighbouring village of Necton.

He added: 'I think most people will be surprised that a buried cable is refused on landscape grounds. It's obviously a disappointment and may delay the project.'

? A similar scheme to install high voltage power lines along the Norfolk-Suffolk border, that would distribute energy generated by the proposed East Anglia Offshore Wind Farm off the Lowestoft coast, has sparked concern among residents in Diss.

The plans, which are still in the early stages, propose installing overground wires to link up to existing power lines between Norwich and Bramford, near Ipswich, but the option of burying them is also being considered.