MILLIONAIRE businessman Duncan Bannatyne suffered a serious blow yesterday after plans for a hotel and casino complex in the region were rejected.

The North-East entrepreneur's firm, Bannatyne Fitness, will have to rethink proposals to create 180 jobs on a Darlington site.

The company wanted to build a 60-bed hotel, casino and 1,000-seat bingo hall on derelict land near its existing Haughton Road health club.

But Darlington Borough Council turned down the application, mainly because officials believed there would be a negative impact on the town centre.

The authority's planning committee voted to throw out plans for the 7.5-acre site.

A casino and bingo hall would have been on separate floors of a two-storey building, bringing a total of about 150 jobs. The hotel would have provided 30 positions.

Casinos are currently restricted to 53 areas of the country, including Newcastle and Teesside, and cannot operate in Darlington.

The Government wants gambling facilities to be where developments can make the greatest contribution to economic prosperity.

But a Gambling Bill, which could come into effect in September 2006, would abolish the restriction.

Councillor David Lyonette said: "The major point here is the protection of the vitality of the town centre."

Coun Gerald Lee said the gambling element would have a divisive effect on the town centre, which already has a Gala bingo hall, in Skinnergate.

Only Tory councillor Charles Johnson voted in favour of the plans, but eight committee members voted against them.

Bannatyne Fitness director Tony Bell said: "We have established on this site that leisure is very popular. We have had to extend the car park and the health club in the last two years, spending about £1m."

It is not known if further proposals will be put forward for the site.