But those leading the fight said the victory was only one round of what could be a long battle.

Community groups, golfers and bowlers combined to oppose a housing plan on the course, arguing it was a crucial part of the area's social fabric.

Lake Macquarie councillors agreed, voting unanimously on Monday to reject the plan by landowner Drysdale Metals to rezone the Morisset Country Club site for housing.

The site includes the country club, golf course and bowling greens.

Country club chief executive Ian Taylor said the club was delighted with the decision.

"We're pleased councillors voted in favour of recreation and social considerations, rather than more housing the area doesn't need," Mr Taylor said.

Councillor Daniel Wallace said the plan would have amounted to "ad-hoc development".

Councillor Wendy Harrison said the club was an "essential part of the Morisset community".

Sunshine Progress Association secretary Bruce Baylis said residents were "very happy indeed" and felt like they had hit a "hole in one".

"It means a lot," Mr Baylis said.

Drysdale Metals project manager Stuart Murray said the company was disappointed with the council decision.

"There are significant commercial factors at play which need to be addressed," Mr Murray said.

"We are seeking advice and will continue to pursue a sustainable outcome."

Mr Taylor, quoting Winston Churchill, said the decision was "the end of the beginning".

"We've now got to sit down with the landlord and work out where we go from here," he said.

"The club is profitable to the point where we can survive."

He said 45,000 rounds of golf were played at the course this year, up 3 per cent from last year.

But the clubhouse needed "a major refurbishment".

"We're burdened with having to pay a private landholder rent and land tax," he said.

"There's never an opportunity to put aside working capital to improve the premises."

Councillors overruled council staff, who had recommended the rezoning plan proceed to the next level.

Staff said the housing proposal had "strategic merit" because the site was within walking distance of the town centre and the railway station.

But Mr Baylis said the location was ideal for the golf course, which he said had "a good reputation".