A well-supported proposal to develop a former football ground into a Jewish school and wider facilities has been passed over by Barnet Council.
Hundreds of Jewish pupils and their parents attended the council's cabinet resources committee meeting on Tuesday night in the hope of swaying councillors.
But the committee voted to sell the four-acre site in Claremont Road, Cricklewood, to housing developers.
It had been hoped the former Hendon FC ground could accommodate a Jewish school, communal sports and play facilities, an adult education centre, crèche and wedding venue.
The future of the site had been in question for a decade, with residents campaigning to secure it for communal use rather than private development.
In a last-ditch move, lawyers acting on behalf of David Hersh, chair of governors at London Jewish Girls' High School, wrote to the council claiming the school's offer represented the best value for the authority. The financial details of the developers' bid have never been made public.
Mr Hersh said the Hendon-based school would now seek a judicial review in the High Court.
In a letter circulated to supporters, Mr Hersh argued that "the recommendation [for residential development] goes against everything Barnet have been promising the community for years.
"The Jewish community is fed up with being sidelined and our needs ignored.
"There is no good reason for the council to reject our bid. As it is, Jewish schools privately educate thousands of pupils in Barnet, saving the borough millions each year."
Around 120 supporters packed the public gallery at the committee meeting, with a similar number of pupils and parents waiting outside Hendon Town Hall. Extra security was drafted in for crowd control.
Former council leader Brian Salinger spoke against the housing company proposal, but those in the public gallery were not given the chance to state their case.
Committee chairman Councillor Daniel Thomas said the agreed proposal represented the best value for money for the authority and was the highest bid received.
After the meeting, Mr Hersh said: "The school has had a lot of support from people offering their professional and other services to help us challenge the council on their refusal to help the Jewish community."
There was further opposition from local residents, who had hoped to take over the site and use it for sports facilities.
They claim the area is protected for public ownership by covenants dating back almost a century.