In a way, it’s a major shock. But if you were in Woolwich Town Hall yesterday, it’ll come as no surprise at all.

Greenwich Council’s licensing committee has refused permission for the four Peninsula Festival licences – meaning no beach, no 20,000-capacity gigs, no campsite, and no “business lounge” on the Greenwich Peninsula during next summer’s Olympics.

Early publicity for the event had carried the council’s logo, as part of its Greenwich Festivals initiative, and cabinet member for culture John Fahy had been a vocal supporter of the event.

Indeed, festival organiser Frank Dekker is renting space from Greenwich Council in offices it is leasing at Mitre Passage, at the top of the peninsula, and in an interview with this website earlier this year had spoken warmly of the expertise the council had made available to him.

But John Fahy’s colleagues, acting in a strict legal capacity, found the application desperately short of detail. In truth, the whole process was dead ten minutes into yesterday’s six-hour hearing, when counsel for the Metropolitan Police laid into the plans for a 20,000-capacity stage area opposite homes on John Harrison Way, for providing a lack of information on just how this would all work.

When barrister Adam Clemens explained that the Met’s facility for dealing with suspicious vehicles was to be right next to the stage area, you could see the wheels start to fall off this plan. What if the police did intercept a car bomb on the site? How would the crowd be evacuated? Without any answers, he said, there could be no backing from the police.

Proceedings continued in a similiar vein all day. A representative from Peninsula Festival contractor G4S said he couldn’t tell councillors about the security plans for, well, security reasons. As one objector pointed out during the afternoon, they may as well have packed up after the police put their foot down, and saved everyone’s time and money.

Those directly affected, residents of the Greenwich Millennium Village plus their neighbours across the Thames, made their voices known in great numbers – even if most couldn’t make a daytime hearing. The presence of a senior Tower Hamlets councillor – opposition leader Peter Golds – added weight to cross-river objections that may otherwise have been overlooked.

But internal strains in the Peninsula Festival organisation also scuppered the scheme. There were disagreements with the Greenwich Yacht Club which meant it was unclear just what councillors were being asked to approve.

But it was problems with the concert area which seemed to scupper the whole thing. The application for the concert area was originally for a 45,000-capacity arena in the name of Kilimanjaro Live, the firm behind the Sonisphere and Wakestock festivals and a sister company to O2 Arena owner AEG. The idea was to hold gigs while the O2 was out of commission during the Olympics.

But with the drop in capacity, Kilimanjaro boss Stuart Galbraith. pulled out. LOCOG’s representative said he only heard the news at 5.45pm the night before the hearing. That’s the Olympics organisers who were said to be working closely with the Peninsula Festival. They wouldn’t back it either. Nor did Transport for London, worried about making too many demands of the Jubilee Line. With a supposedly neutral sound report making comments about a “once in a lifetime” event, councillors weren’t impressed.

So how did we end up here? Why did the council get tangled up with this? There was a genuine desire to find something to liven up the Greenwich area during an Olympics lockdown that will see many attractions closed, and to capitalise on any feelgood factor generated by the games. With few plans for big screens where people can see the action taking place in a shut-off Greenwich Park and other venues, many people will miss an event that they could have enjoyed while the capital is turned on its head for the Olympics.

It may well be that the authorities simply weren’t willing to countenance anything to put additional strain on a stretched city. But with a flawed plan, and unable to reassure neighbours that they weren’t going to be driven mad by noise, it was always going to fail – even in Greenwich.

So what happens now? Will another plan fill the gap? We may find out more today – as Frank Dekker still has one event up his sleeve, Sail Royal Greenwich, which is being launched today. No noise, little hassle – and, most importantly for him, no licence needed from the council. Keep an eye on the river this lunchtime for a preview of something that’s coming to London next summer which few people can argue about.

11.55am, North Greenwich Pier: Frank Dekker’s remaining optimistic about the future. “It’s a process,” he said at the launch of Sail Royal Greenwich. More soon… (…er, on Friday)