The developers, however, claim it would cost them £300,000 to come up with more detailed plans for Phoenix Place and Corporation Wharf at the bottom of North Street.
There was a great deal of hand wringing at Tuesday's meeting of Lewes District Council's planning committee when members discussed the outline plans for 204 homes and 5,075 square metres of commercial space.
Officers, recommending refusal, said a full application was needed for such a complex scheme, to include a footbridge over the river, flood defences and a road link to the Phoenix Causeway.
As far as homes were concerned, the applicants had indicated willingness to seek permission for some 51 affordable homes on an adjacent cark park, as affordable homes on the development site would not carry the cost of flood works.
And officers added: 'The industrial estate is poorly laid out, with large areas of under-used land. However, there is still commercial interest there and all of the units on the application site are occupied.
'The applicants have not submitted any information to suggest that the future of the estate really hinges on a major redevelopment proposal, or that the economic decline of the industrial area is imminent.'
Paula Yates, president of Lewes Chamber of Commerce, said the chamber objected simply to the loss of commercial space. A strategic view of the wider area was needed.
Simon Anderson said Lewes Greens refused to believe that the only way to finance adequate flood defences was to allow a £50 million development.
But development solicitor David Barling said: 'The Environment Agency supports us because we are providing a flood solution. The benefits are enormous.
'The negative points can be overcome by discussion. A full application would cost £300,000 and that is unreasonable. Perhaps we could come back at a later stage and put this scheme to you again.'
Cllr Jim Daly suggested deferment. The whole thing was being rushed, he added. Everything had been squashed into too short a span of time.
Cllr Michael Chartier said: 'This is one of the most significant applications to come our way for many years. We are here to make a decision. If we need more information, then that is what we must get.'
Supporting refusal, Cllr Kim Clark said affordable housing was urgently needed in Lewes, but none was being suggested for this specific site.
Cllr John Webber supported a refusal although, he added, a development at a later stage might be welcomed.
The application was refused by seven votes to one, with one abstentation.
Architect Lap Chan said after the refusal: 'We are weighing up our options. We could go to appeal or we could enter into further discussions with the planners to see if a mutually acceptable scheme can be drawn up.'