This month, the Victorian Civil and Administrative Tribunal knocked back a plan to subdivide part of the 27-hole Upper Beaconsfield golf course set in a green wedge zone into seven lots of about 15 hectares.

The golf club had then planned to re-subdivide into residential lots between 1.5 and 2.8 hectares on the McArthur Road side of the course.

The proposal had been approved by Cardinia Shire Council last year.

VCAT member Geoff Rundell found that the 105.2-hectare subdivision, identified as farming land, would cause adverse environmental impacts on the land's "attractive slopes".

The impacts included the likely spreading of feral weeds and animals and removal of vegetation.

Under planning policy, the "agricultural base" of the area had to be protected, Mr Rundell said. The land, poor in agricultural quality, was unlikely to ever return to agricultural purposes if subdivided.

Mr Rundell said the golf club's claims to be in a dire financial situation and at risk of closure if the proposal failed were irrelevant.

"It would be difficult to demonstrate that [the subdivision] is consistent with the objectives of the green wedges, the [Rural Conservation Zone] and the [Environmental Significance Overlay]."

Objectors included the Southern Ranges Green Wedge Coalition, the Green Wedge Coalition and the Cardinia Environment Coalition.

CEC spokeswoman Kelly Brooks-McMillan said the decision stopped the golf club, with the backing of Cardinia Council, from going against "all planning policy" and bypassing the council's own strategy.

"No one wants to see the golf club fold. They were trying to go below the minimum lot size for the rural conservation zone."

In a council report last September, it was found the proposal was a "reasonable balance" between maintaining rural residential character and environmental values while retaining the golf course.