The owners of the Crofters Hotel at Garstang were left devastated after the UK Department of Communities and Local Government ruled that its name sign on the A6 at Cabus contravened planning regulations.
Nicola and Derek Cheetham, who have spent more than £300,000 refurbishing the 30-bedroom hotel including £15,000 on the sign, said they were "bitterly disappointed" at the latest development in a saga which has been going on since they bought the Crofters in May 2007.
The couple had appealed to the Inspectorate of the Communities and Local Government Department, which is responsible for planning applications, after Wyre Council said the five metre high sign was too large and not in keeping with the local environment, and must be removed.
"It's very sad, not only for the Crofters but also for the local community and the 30 staff we employ," Nicola said. "Although we are a landmark hotel and well known locally we need prominent signage to attract guests travelling on the A6. Our ability to win even more passing trade will be seriously affected if the sign has to come down."
The Crofters is one of the busiest business meeting venues in Lancashire, hosting events with up to 250 delegates as well as almost 40 wedding receptions a year. It was recently awarded an AA Rosette for the high quality of its food.
Nicola said she was originally told by planners that the hotel did not require permission to erect the sign but after it was up she was advised this was not the case.
"We feel the council and UK Government Inspectorate are being unfair and inconsistent, and failing to take into account the key role played by tourism and hospitality in the local economy," she commented.
"Just along the road Barton Grange garden centre has a similarly sized sign yet it is allowed to keep that," she added. "It is a marvellous garden centre and local attraction but where is the consistency in the regulations?
"We are an important part of the local community and are very grateful for the great support we've received from them in this dispute.
"However, although local residents are overwhelmingly behind us we're bitterly disappointed that Wyre Council has so far failed to appreciate the substantial contribution which the Crofters Hotel is making to the economy of this part of Lancashire."
The owners said they were now "considering their remaining options" for the signage's future.