A MULTI-million pound plan to build an international film studio on the outskirts of Edinburgh looks to have suffered a major blow after a crucial decision by the Scottish Land Court.

The court has found that land, two small holdings currently worked as a tenant farmer by James Telfer, cannot be used for the development in the Pentlands.

The decision has been welcomed by Scottish Green MSPs, who backed the Telfer family's desire to remain farming on the land, which is owned by the Pentland Estate.

Nick Gibsone, co-owner of the Estate, said his family is devastated by the Land Court's decision.

PSL Land Ltd, which wishes to build the £200m film studio on the land, said it respected, but is disappointed by, the decision and is now considering its options.

The plans have already been backed by Scottish Government ministers, but it is unclear now whether the planned studios can go ahead without the use of the around 60 acres in question.

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The Scottish Land Court had to decide whether to authorise the "resumption" of the two smallholdings farmed by Mr Telfer.

"Resuming" is a legal term referring to the process by which a landlord can, with the court's approval, take land back, often for development purposes.

However, in its lengthy decision, the court says "the application should be refused for want of a reasonable purpose in relation to the good of the estate."

The Telfer family have declined to comment.

Pentland Estate said it may now appeal to the Court of Session.

Mr Gibsone said: "We are not by any means a wealthy family and the current estate is little more than 100 acres.

"We have spent five years trying to make the best of what we own and leave a lasting legacy that would be of benefit to the many, not the few.

"We had hoped to reach an amicable agreement with the smallholding tenant, Mr Telfer, within the provisions of smallholding law, which would have resulted in substantial compensation and this remains the case.

"This would also enable the developers to facilitate a project of national importance and make much-needed improvements to local land, in particular restoration of a site where thousands of tons of waste material had been left by a previous tenant.

“We are disappointed not only for ourselves, and the developers, but for Midlothian and Scotland with the loss of hundreds of potential jobs and the boost to the economy the film studio could deliver."

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He added: "We must now consider all options, including appealing the Land Court’s decision to the Court of Session."

The Land Court judgement reads: "We recognise that deciding the case in such a way that a project said to be of national importance does not go ahead is a serious matter.

"However this is not the only place in Scotland on which such a development can take place.

"The applicants’ pleadings tell us that 28 sites were considered (by whom is not clear), then the list shortened to two, of which the Pentland site was preferred."

It adds: "We also acknowledge that a huge amount of work, with no doubt commensurate expense, has been invested in taking the project this far, no doubt partly because of this court’s insistence on being satisfied that there is a reasonable likelihood of the stated purpose of resumption going ahead...but the Court’s assessment of reasonable purpose cannot be circumscribed or restricted by awareness of such investment."

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The judgement notes: "Had there been a “public interest” criterion... that would have been a different matter.

"The project obviously has considerable potential to bring employment and all sorts of economic activity in its wake.

"But there is no such criterion and we have had to decide the case on our understanding of the law as it stands."

Alison Johnstone and Andy Wightman, Scottish Green MSPs for Lothian, welcomed the ruling.

In a joint statement, they said: "We welcome this decision from the Scottish Land Court.

"It is clear that the landlord has no lawful grounds to resume Jim Telfer's tenancy.

"Quite why the landlord, the developers and some voices within the Scottish film industry ignored the fact that a sitting tenant has legal rights that have now been upheld is for them to explain."

They added: " We have been consistent in our support for our constituent throughout this process and hope that the stress and anxiety facing Jim and his family is now over.

"It is now incumbent on industry and the Scottish Government to deliver the much needed national film studio on a site where development would be lawful."

The Association of Film and Television Practitioners Scotland said it shared PSL’s disappointment with this decision.

In a statement, it said: "During a hearing by the Scottish Government culture committee recently, a succession of industry professionals gave evidence that lack of studio space was the main reason for Scotland is under achieving in the Screen sector.

"Scotland is now the worst performer in any of the UK nation and Regions

"It is obvious from the ruling that the court did not fully appreciate the financial significance of this studio for the Film and TV industry in Scotland and the numerous crew members who work in it.

"Indeed the Scottish government labelled it as a project of national importance."

It added: "This is yet another example of how the screen sector has been mismanaged by the numerous quangos that have responsibilities for it.

"The Scottish Government needs to take urgent action now to support the film and TV industries that will generate large amount of income that will replace dying industries."