A judge has blocked plans to develop the synagogoue of the defunct Blackpool United Hebrew Congregation because it would affect the character of the Grade II-listed building.
Thompson Property Investments had applied to build flats at the back of the 100-year-old building, which was deconsecrated in 2012 and sold.
The plan had originally been rejected by the council after objections from Historic England (formerly English Heritage).
But Thompson successfully appealed to a planning inspector, who felt the development would "do little to harm" the character of the synagogue.
A High Court judge has now upheld a further appeal from Blackpool Borough Council against the development.
Sitting in Manchester, Mr Justice Kerr concluded that the planning inspector had given too little weight to the conservation of the synagogue.
The judge said the proposed reduction in the floor space of the prayer area would harm "a heritage asset".
He was also concerned about the proposed removal of the stained glass windows.
The inspector's reasoning, he said, was that "as long as they are preserved and not destroyed, it does not matter very much whether they are preserved in situ or moved.
"That does not seem to me to be giving great weight to this historic feature of the synagogue."