Everton have failed to obtain planning permission for residential building on their former Bellfield training ground, a decision that will cost the club £10m. The Toffees had hoped to sell the site in West Derby for housing, with the cash going towards their £78million contribution for the proposed new stadium in Kirkby.
The club insist that the new stadium will not be affected by the Bellfield site blow with a club spokesman saying: "We can find that money from other sources."
A separate planning inquiry is currently under way to decide whether the club's new stadium project in Kirkby can go ahead, and it is expected to last another three weeks.
Liverpool Council are disappointed that the club are moving outside the city boundaries, but lengthy debate over potential new sites inside the city have failed to produce a solution.
Everton feel the decision is political, and acting chief executive Robert Elstone said: "The truly disappointing aspect of this is that the politicians who run this city went against the recommendations of the Council's own planning experts.
"In such circumstances you have to ask, why is that? What is the point in employing experienced and learned experts if you are simply going to ignore their advice?
"Over the past few years we have constantly shown a willingness to work with Liverpool City Council to safeguard the long-term future of our football club...sadly, it does not appear to be a reciprocal arrangement.
"The council's own director of planning threw his weight behind this project - he believed it to be both sensible and suitable - and so did we."
Despite planning department approval, that scheme was rejected by Liverpool council's planning committee last year.
Now the result of the appeal has seen Everton's plans rejected by a government planning inspector.
A club spokesman added: "We will have to find another use for the land."
Liverpool Council leader Warren Bradley has called for talks with the club on all the issues. He said: "The planning committee made the decision to refuse the application. And that has been vindicated by the inspector."