A Tasmanian council has blocked a contentious private tourism development with helicopter access in the state’s world heritage wilderness.

The luxury camp proposal for remote Halls Island on Lake Malbena, in the Walls of Jerusalem national park, had been waved through by the Morrison government in August against the recommendation of expert advisory bodies.

The Liberal state government, which has strongly backed the development, immediately flagged the likelihood of an appeal.

Environmentalists said the decision was a win against the state’s push for more commercial tourism in national parks and the vast Tasmanian Wilderness World Heritage Area, which covers about one-fifth of the island.

The proposal by eco-tourism business Wild Drake would involve tourists being flown in and out of a permanent campsite constructed on the island. It would cater for up to six visitors at a time interested in bushwalking, kayaking and learning about the area’s cultural history.

At a public meeting on Tuesday, the Central Highlands council rejected the proposal six votes to three. Some councillors were critical of state and federal authorities for leaving the decision on a development in the world heritage area to local officials. Some said they believed it did not fit with Parks and Wildlife Service policies.

The Wilderness Society acting campaign manager Tom Allen said it was a victory for people power, pointing to the 1,340 objections lodged against the proposal.

“Literally thousands of Tasmanians have stepped up to protect world heritage wilderness from a profiteering government sponsoring exploitative practices,” he said.

The premier, Will Hodgman, said the councillors appeared not to have followed the planning scheme and had voted against the advice of their own planners. “The government understands there are strong grounds to appeal the decision,” he said.

Hodgman, who has declared the state “open for business” for development proposals on public land, said the camp had been subjected to rigorous commonwealth assessment.

A federal environment department assistant secretary acting on behalf of the environment minister, Melissa Price, in August found the camp was not a threat to matters of national environmental significance and did not need federal approval.

Three expert bodies advised against the development going ahead as proposed. The National Parks and Wildlife Advisory Council, a state body, expressed concern about opening the world heritage area up to private commercial development with permanent structures and potentially frequent helicopter flights.

The Australian Heritage Council found the development would have considerable impact on world heritage values and warned the buildings, helipad and tracks did not conform to zoning rules. The Tasmanian Aboriginal Heritage Council said the proposed camp was near a recently discovered rare heritage site.

Wild Drake owner Daniel Hackett told a council meeting his employees had been bullied during the application process, receiving abusive late-night phone calls and messages on vehicles and social media.

Allen said he sympathised with Hackett and the Central Highlands councillors. “They and the wider community are victims of substandard planning laws that don’t work,” he said.

The fight over the camp comes against a backdrop of lawyers, academics and environmentalists pushing for the federal Environment Protection and Biodiversity Conservation Act to be strengthened or replaced. A Guardian Australia investigation last year found campaigners and political veterans believed it was now harder to win federal environmental protection than at any time since the 1980s.

In December the Labor leader, Bill Shorten, promised to introduce a new Australian environment act and create a commonwealth environmental protection agency if elected, but is yet to release details.