The Longville Arms at Longville in the Dale, near Much Wenlock, has been shut since 2016, and the current owner had claimed the business was no longer viable.
An application for change of use of the building to allow it to be turned into a home was rejected by Shropshire Council''s south planning committee after members heard it had previously been a thriving community venue.
Dr Colin Stevenson, vice-chairman of Rushbury Parish Council, spoke against the application. He said: "We see this as an important community asset. It has functioned as such in the past and we believe it can continue to do so.
"It is important to the local tourist industry. There are caravans and holiday lets around and the owners have nowhere to suggest tourists can go and have a drink and get a meal.
"Were it not to continue as a public house, we feel the better use for it would be as some other commercial use, for example retail.
"The village hall committee last month held its first 'pop up pub' session. That was a test of how interested the community is in events like that and it was attended by more than 100 people.
"We do see that there is a future for the Longville as a pub."
Dr Stevenson said interest had been expressed about a community group forming to bid for the pub but that had not "come to fruition".
The committee said the asking price of £495,000 for the pub was not realistic and urged the owner to lower it in order to entice potential buyers who could revive the business. Members voted unanimously to reject the application, in line with the planning officer's recommendation.
Councillor Cecelia Motley said: "We have dealt with these situations before, where a previously flourishing pub has been run down and eventually has been put up to be changed into residential.
"The Longville Arms I remember well as a very flourishing establishment. It sits on the main road between Church Stretton and Much Wenlock, and that road carries on over the top of Wenlock Edge. This is not stuck in some little backwater somewhere.
"The community is immensely resentful about this, they really need to have a community meeting place in Longville.
"I believe that this has been a deliberate attempt to run this pub down."