Wellington City Council is assessing its options after a massive blow to a significant development in Shelly Bay

The Court of Appeal's sided with community group Enterprise Miramar, to quash a decision by the council to grant it resource consent.

The project included the construction of 350 new homes and a boutique hotel.

The court found the council made an error of law in its interpretation and application of one area when determining whether or not to grant resource consent.

City council chief executive Kevin Lavery says they'll be studying the decision in detail before making further public comment.