The planning appeals body has refused permission for a new housing development at Greencastle in Inishowen.
Twenty-two homes were planned for the Drumaweir development, as part of the third phase of larger residential scheme.
Provisions had been made for the construction of a further 22 semi-detached units.
Overall plans also encompassed a number of amenity areas, including a tennis or basketball court, two equipped play areas and a large green.
Earlier this year, Donegal County Council rejected the developer's planning application due to water supply issues.
Again, the water supply proved a problem when the plans reached An Bord Pleanala, which said the proposed development would be premature, with regards to the deficiency in the existing water supply serving Greencastle.
The appeals board also said the plans would seriously compromise the residential amenity potential of future residents of the proposed development.
(PR/JM)
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