A LONG-SERVING Tory MSP who is stepping down from Holyrood has suffered a blow after rejection of a wind farm development on his land cost him a deal worth £8 million.

Sir Jamie McGrigor, who has been MSP for the Highlands and Islands Region since 1999 and is his party's environment spokesman, had struck a lucrative agreement with developer RWE Innogy which wanted to build a 45-megawatt wind farm on his sprawling 3500-acre Ardchonnel estate at the east of Loch Awe.

The plans were strongly opposed by many of Sir Jamie's neighbours and were thrown out by Argyll and Bute Council due to fears over the impact on the landscape, but RWE appealed to the Scottish Government which has the power to overturn the decision.

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But it ruled that the proposed 15-turbine windfarm on the Tory grandee's land would not be going ahead, after a Government reporter, Dan Jackman, backed the council's decision. He said that the project would create "unacceptable significant adverse landscape and visual effects" and that concerns expressed by the council, Scottish Natural Heritage and some other objectors were "well founded".

Irene McClounnan, secretary of the social club in the nearby village of Dalavich, and a fierce opponent of the windfarm, said residents were "over the moon" at the outcome.

She said: "The whole place is just clapping their hands. All our hard work paid off. I think Sir Jamie will be keeping a low profile around here."

Sir Jamie, an Old Etonian baronet, is likely to be rather less pleased with the ruling. According to the agreement he struck, he would have received £7,000 a year "base rent" for each megawatt of installed capacity, meaning £315,000 a year for the 45MW which is planned, plus extra cash if the wind farm generates above expectation. Index-linked over the 25-year lifetime of the turbines, the income would have been expected to top £8m.

RWE Innogy said it was "very disappointed" that the project would not be going ahead, claiming it would have helped hit renewable energy targets and would have been worth £200,000 a year to the local community.

Sir Jamie, who has been known to perform at folk festivals under the stage name 'the Midnight Shepherd', announced last month that he would not be seeking re-election in May.