The Land and Environment Court rejected the Quranic Society's application to build a $19 million school for 900 students in a rural area on the outskirts of the town south-west of Sydney.

It found that the plans were inconsistent with the site's zoning restrictions.

Camden City Council cited planning arguments when it first blocked the proposal a year ago.

But fierce community opposition to the project often relied on racial and religious arguments.

The case attracted international media attention when two pigs' heads were rammed onto metal stakes at the site, on the corner of Cawdor and Burragarong roads, in 2007.

And at the hearing in April, the council's evidence included a letter signed by four Christian churches stating that Islam espoused views that were "incompatible with the Australian way of life".

The council's legal team also presented a DVD featuring the views of concerned residents, one of whom said the school would be a "breeding ground for terrorists".

However the council insisted its refusal was based on planning grounds, arguing it was incompatible with the rural zoning and would cause problems for traffic and neighbouring farms.

The Camden case has been the most high-profile bid to keep Islamic schools out of areas the outskirts of Sydney.

Since the Quranic Society's application was first blocked in 2007, several other applications for schools have faced strident opposition from communities on the suburban fringe.

One of the biggest Islamic schools in Australia - a 1200-student school in Bass Hill - will be built after its backers won an appeal in the Land and Environment Court last month.

End Item/ 129