The company wanted to boost its green credentials, being powered by energy supplied from the towering turbine, which, including its blades, would have stood almost as high as Blackpool Tower.
But councillors, worried about the turbine's impact on the flat Wyre countryside, have told the cheese company and its backers the project is too big and would be out of place.
About 50 residents from Churchtown area attended today's meeting of Wyre planning committee.
Several of them spoke in the public section of the meeting, voicing worries about noise, environmental impact and the effect on wildlife.
Councillors sided almost exclusively with the protestors.
Coun Tom Balmain of Garstang said: "It is a massive structure. I consider it would be a complete blot on the landscape and out of character with the area."
Coun Ramesh Gandhi of Thornton congratulated residents for their articulate opposition.
Coun Marlene Colby of Fleetwood said she was a supporter of wind-generated power, but she had been "gobsmacked" by the scale of the Dewlay proposal.
Coun David Sharples, whose Catterall ward includes the Dewlay site, praised the commercial success of the cheese firm, but said he could not support the scheme.
He said: "It is incongrous to the local scene. It is massive - the largest one on land in the country."
The only support came from Coun Ron Shewan of Fleetwood who said green energy was the way forward and that the alleged health risk and distraction to motorists from flicker effect from the turbine's blades had been overplayed.
Councillors backed an officers' report which urged the plan be refused as the proposed turbine was seen as too big, too high and would be out of place in the low lying countryside. The document also said it would be "an incongrous feature" in the rural area.
More than 300 people from the greater Garstang area had objected to the plans. Other opponents included several local parish councils and Blackpool International Airport, though the committee heard that the airport's objection had been withdrawn.
* The company working with Dewlay on the plan, Wind Direct of Lancaster, has already stated it will appeal against the decision.
* For more from the council debate and the latest on this story, see next Wednesday's Garstang Courier (out on Wednesday, September 10).