Developers’ dreams of building a giant student village to house up to 2,000 undergraduates – backed by Falmouth Town Council in a major U-turn – appear doomed.

The bold blueprint to site student residences alongside a hotel, surgery, shops, restaurant and park and ride on 280 acres of farmland at Treluswell, near Penryn, is not on the list of sites approved by Cornwall Council. The county authority has the real power in this area and probably won’t back the mega development.

Equally unlikely to materialise is the massive increase in demand for accommodation needed to make such a huge venture viable. Falmouth University has started to shift a lot of its focus to distance learning.

Conventional courses will continue to be launched and delivered at both the Woodlane and Penryn campuses but the future market for student residences in this locality could be much lower than some property speculators seem to imagine. Most of these new online students will never need to be housed anywhere.

Along with Exeter University, Falmouth successfully applied to Cornwall Council to lift the overall cap on student numbers and still has ambitious growth plans. But they are now concentrated more on the delivery of online courses and striking up strategic partnerships with institutions based beyond Cornwall.

Just a mirage? How the applicants hope the Penvose student village will one day look

Robert Hillier, Falmouth University’s director of communications, explained: “Off-campus growth will be considerably higher than that on campus and our business plan reflects this. Entering new markets and offering courses online is vital in allowing students from around the UK and the world to access Falmouth’s teaching and learning without having to come to campus.”

The proposed Penvose Student Village was approved by Falmouth Town Council last week. After a drastic rethink, councillors welcomed a “constructive and positive” plan to address what they wrongly expect to be a massive rise in student numbers.

The fact that this mega development is unlikely to see the light of day might come as a major disappointment to those who voiced enthusiasm for the student village plan in a vox pop conducted by TruthFal.

Falmouth University has developed close ties to Cornwall Council recently. The county authority overrode local objections to raise the cap on student numbers. It has also teamed up with the university on a scheme at Treliever, next to the Penryn campus. Another private development, earmarked for the Kernick industrial estate, could also be passed by Cornwall Council.

In a drive to defuse alarm and improve town-gown relations in Falmouth, representatives from the two universities have attended town council surgeries and published a quarterly newsletter, which is delivered to every home in the area, as well as meeting with town and county councillors regularly and responding to media requests.

Yet fears persist in the local community that Falmouth could soon be flooded by students – fears reignited last week when planning inspector Neil Pope granted permission to Rengen Developments to build a four-storey block for 190 students at the Ocean Bowl site, near Falmouth Docks railway station.

Approval for this was granted by Cornwall Council on appeal after Rengen presented its case in a public hearing at Falmouth Rugby Club. The proposed block will include separate study rooms for the students, a reception, gym plus infrastructure and landscaping.

Responding to the decision, local MP Sarah Newton told the Falmouth Packet: “I am very disappointed. I have always felt the best place for new student accommodation is on or near the campus, not in the town.”

One Pendennis Rise resident, Sue Lewis, said of the decision: “Money talks and I have no faith in democracy.”

Another, Charlotte Mitchell, said: “I’m doing a ‘Fexit’ and leaving Falmouth.”

Locals also voiced their anger and dismay about the decision on Facebook page Save our Falmouth, which had dozens of comments opposing the planning permission. Roger Williams commented: “It’s disgusting. But what do the local opinions matter against a greedy developer ruining towns and our areas?”

Aiden Sparks wrote: “The only economic benefit is to the bank balances of a minority of people who have absolutely nothing to do with Falmouth or Penryn; people who’re out to change the face of an area for money. It’s not for students or for the local population. Give these fat cats an inch and they’ll take a mile.”

The protesting local residents seem unaware that Falmouth University has performed what could be viewed as its own U-turn, ditching previous plans to ramp up dramatically the numbers pursuing a degree on the Penryn and Falmouth campuses.

What was branded Project 8000 has slipped off the agenda. On-campus intake figures are projected to flatline after Falmouth suffered a 12 per cent drop in applications this year – more than twice the national average.

The number of freshers signed up in September for the current academic year was below what many local residents feared and what the university budgeted for, forcing it to draw upon its reserves to balance the books.

Falmouth and Penryn now look set to be affected by the growth of Falmouth University much less than many locals fear. The two local communities are certainly not going to get swamped by students.