THE Sari Club - where dozens of Australians were killed in the Bali bombings - will remain derelict after authorities rejected a plan to make the site a peace park.
It was hoped the site would become a memorial to the 202 people - 88 of them Australians - who died in the October 2002 terrorist attack.
But Balinese officials said this week they could not accommodate the park in Kuta.
The news has devastated Dallas Finn, whose five-year campaign heading the Peace Park Foundation has cost him $300,000 in lost wages and money that he has pumped into the scheme.
"It was all go. We had the support of government departments - and now this," said Mr Finn, who moved to Bali for 18 months to organise the campaign and work with community leaders.
"This was going to be a symbol of peace and beauty for everyone to visit and enjoy."
He recruited renowned landscape designer Michael White to his team and his drawings were presented to the Balinese Government 16 months ago.
Mr Finn has letters of support from the heads of Kuta village, who told him the Sari site owner would be compensated for the land that could then be bought by the peace park trustees.
"It is so frustrating," he said. "I've done the ground work, but someone else has to make the next move."
The weed-strewn site was once used as a car park, shocking survivors of the bombing, who found cars driving over memorials that had been laid there.