Sutton Coldfield-based Muller Property Group had applied for outline planning permission for the 9.8 acre site near Barons Cross Road, saying that it would create an "attractive ‘landscape led’ development".
An ecology expert with Herefordshire County Council told planning department colleagues that the site lies within the catchment of the River Lugg Special Area of Conservation. It is recognised as being of "international importance for its aquatic flora and fauna".
The officer added: "Levels of phosphates in the River Lugg exceed the water quality objectives and it is therefore in unfavourable condition.
"Where a European designated site is considered to be ‘failing’ its conservation objectives there is limited scope for the approval of development which may have additional damaging effects."
Planners were also told that the Leominster Wastewater Treatment Works outfalls directly in to the River Lugg catchment, and that any increase in flows through the treatment works would lead to additional phosphate discharged into the already failing river system.
"No additional contribution of phosphate at any level is currently acceptable," the officer added.
The treatment works had also advised that there is currently no certainty that it has the capacity to manage the additional foul water flows created by this development.
Planners also said the application was unacceptable because although the land has been earmarked for development, it needs to have a masterplan.
It also did not have a legal agreement to secure the provision of affordable housing.
The developer in its application said the "overall vision for the site is to create an attractive ‘landscape led’ development, which will integrate seamlessly within the existing mature landscape setting, and reinforce the local character of Leominster.
"It is envisaged, given the site’s location, that the proposal could positively contribute with the facilitation of the Leominster Strategic Urban Expansion to create a healthy, connected and pleasant new environment with a range of new dwellings fit for modern twenty-first century living."