CITY of Greater Bendigo councillors have once again voted against the officer's recommendation and approved an 86-lot subdivision in Aspinall Street, Golden Square.
While three councillors fought to save the high-quality native vegetation at the site, the majority believed a good comprimise had been met with the proposal.
The development, originally citing 78 lots, was approved by councillors in 2010 and later refused by the Victorian planning tribunal in 2011.
Council officers recommended that councillors refuse the permit at this week's meeting, due to the quality and density of vegetation at the site.
However most councillors agreed that while the proposal had its flaws, it was the right way to go.
In moving the alternative motion, Cr Lisa Ruffell said the development would encourage growth in an appropriate residential area while maintaining 71 per cent of vegetation on the site.
Cr Rod Campbell also acknowledged the approval from the Department of Environment and Primary Industries and the CFA and said the current proposal was far better than the original application.
However Cr Peter Cox said while the applicant - the Catholic Diocese of Bendigo - was seeking to make money out of the site, it did not justify the loss of 30 per cent of valued vegetation.
"You can't sacrifice a moral responsibility to cater for another. It's a matter of principle (and) natural heritage should be seen as important as built heritage," he said.
You can't sacrifice a moral responsibility to cater for another.Cr Peter Cox
Crs James Williams and Rod Fyffe also voted to refuse the permit, with Cr Fyffe saying councillors had done a "disservice to locals".
Stage one, which includes 35 lots, will begin in October, and is scheduled to be ready by Easter 2015. Almost half the property will be donated for use as a nature reserve.
Diocese Business Manager Cameron Fraser said the development would raise money for the works of the church, including welfare and education programs.
He believes the Diocese have a very strong case if the decision was challenged at VCAT.
Aspinall Action Group spokesman Greg Williams said the group was weighing up its options on what to do next. He questioned the motives, fairness and good governance of some councillors, saying they had little regard for protecting vegetation.
Councillors also approved a six-lot subdivision at Lansell Terrace in East Bendigo, with an extra condition to protect vegetation in the area, and voted to protect a former housing commission house at Long Gully from demolition on heritage grounds.
The council's draft economic plan was also released for public comment.