The owners of two cherished local businesses in the heart of Petersfield are in “disbelief and shock” after a planning inspector gave the thumbs up to a controversial redevelopment.

The Bakery Lane saga looks set to end in disappointment for bosses and supporters of Fez and The Blacksmith’s Daughter as an appeal to replace the units containing both businesses has been allowed.

Applicant and landlord Heinz Naef turned to the planning inspector after his bid to replace the “no longer fit for purpose” barn with a single-storey commercial unit was rejected early this year.

Inspector Paul Burley acknowledged the scheme “goes against the wishes of the community” with more than 120 written objections being submitted, but had to base his decision on policy and legislation.

The inspector declined a request to hold a public inquiry because of the weight of already-submitted information, and visited the site just a week before the appeal was granted.

The inspector said there was no evidence to suggest redevelopment would cause hardship to either tenant, and even suggested their closure would not have a harmful impact on the town centre.

He added: “There is no evidence before me which demonstrates that there are no alternative premises which the current occupants could move to.”

Bilsen Gonul and Kristina Cousen, respectively of Fez and The Blacksmith’s Daughter, initially declined to comment but have since released a joint statement.

The pair said: “We have received the news that the landlord’s planning appeal has been granted.

“This means he now has permission to develop the site where Fez Bazaar and The Blacksmith’s Daughter are located.

“We are in disbelief and shock that, after four years of successfully challenging several planning applications and a previous appeal, that the planning inspector – based in Bristol – has decided against the wishes and objections of the town.”

The pair finished by thanking well-wishers for their time, support and “incredible kindness”.