Councillors gave the go-ahead to turn The Rose in June pub, in Selsmore Road, Hayling Island, into 12 homes, on Thursday.

Havant Borough Council's planning committee gave the go-ahead despite an impassioned plea by residents, who staged a protest outside the Civic Offices calling on councillors not to change the use of the 180-year-old building.

Paul Fisher, chairman of Hayling Island Residents' Association, described the decision as a "black day for the Island.

He told the Islander: "The councillors simply did not listen to us."

Councillors heard the pub was an extremely popular watering hole with both residents and tourists until the parent company SFI went bust in 2004.

It has been empty since 2005 and has become the target of vandals.

The controversy over the pub has been rumbling on ever since with the owners, Monterrey Ltd, saying it has been unable to find a buyer prepared to pay the asking price of £800,000 for it as a pub and wanted to turn it into homes.

The listed part of the site - a 200-year-old barn - was burned down in May 2008, but Hayling couple Carole Mackie and Ian Murray were turned down last year when they put in an offer of around £350,000.

They wanted to reopen The Rose and June as a restaurant and bar but eventually switched their attention to the Inn on the Beach.

John Perry, from the Hayling Community Board, who spoke on behalf of residents at the meeting, told councillors: "In 2008 a survey was conducted by the applicants which showed a third more residents thought a pub was more important than housing.

"There was still the problem of the listed structure and very fortunately for the applicant it was torched precisely at the right time to overcome the listed problem. The emergency services confirmed it was arson."

Richard Greenwood, the agent for Monterrey, said the firm had done everything it could to market the pub, but with 53 watering holes closing in Britain each week he claimed it was not a viable option.

Despite the protests from residents, councillors said they felt their hands were tied.

Cllr Elaine Shimbart said: "I can well understand the general feeling. It's very sad to lose a pub but, quite honestly, it has been closed for five years now.

"If someone came along tomorrow and said they wanted it as a pub, could they make it pay?"

Councillors voted unanimously to allow Monterrey to demolish and turn it into 12 houses and flats.

HIRA had called for the building to be saved from the developers, hoping that it could even be used eventually as a civic centre - if a parish council was set up for the Island.