Plans to convert Wantage's cinema into flats were refused permission after councillors heard the business was a valued local entertainment facility which could be made financially viable.

The proposal for the change of use and sub-division of the Regent Cinema, in Newbury Street, into eight flats, was turned down by the Vale of White Horse District Council's development control committee on Tuesday.

Councillors heard there had been strong objections from Wantage Town Council and Grove Parish Council as well as a 2,036-name petition against the move.

Planning officer Mike Gilbert told the committee that a specialist consultant employed by the council had said the cinema was capable of being a viable business.

Recommending the plans should be refused, Mr Gilbert described the two-screen cinema as a valued local entertainment facility, which contributed to the vitality of the town centre.

But Bob Langton, agent for the applicant Suffolk Life Pensions, which owns the building, told the committee: "A local business cannot be expected to sustain losses year after year and subsidise a town centre amenity."

He said the cinema had lost money in four of the past five years and audiences had dropped from more than 53,000 in 2001 to less than 37,700 in 2004.

Last year the operating loss was more than £13,000.

Mr Langton, who also represents Paul and Susan Kirwin, who run the cinema, urged the committee to defer making a decision so other options could be explored, including the possibility of screening films in the Civic Hall.

He said: "The cinema will close whether you like it or not -- it's just not viable."

Ward councillor Jim Moley, a strong supporter of the cinema, said it formed a much-needed social facility for Wantage, Grove and surrounding villages.

He said: "The popularity of the cinema is indicated by the size of the petition. The cinema is capable of a profit as a cinema and should remain as a cinema."

Following the committee's decision, Mr Langton said the applicants would be very disappointed. He added that an appeal would be considered, along with whether the cinema should be shut or kept running at a loss.