His controversial plan to build a 1 billion golf resort, capable of hosting the Open, on a fragile dune system on a spectacular stretch of coastline was thrown out on the casting vote of the chairman of the Aberdeenshire Council planning authority.
After the decision, all the signs were that the billionaire property tycoon and star of the American version of The Apprentice would walk away from the development he had hoped would be his lasting legacy to a game that is his abiding passion.
The shock decision to reject the massive scheme was taken after a heated three-hour debate at a meeting of the council's infrastructure services committee in Aberdeen.
Councillor Martin Ford, the committee chairman who used his casting vote to reject the scheme after a 7-7 tie, said: "The golf course can go somewhere else.
"We are having a pistol held to our heads. This is a form of moral blackmail. You can only have it if you sell your soul. And I don't think we should sell our souls. It would be a grotesque mistake to grant it. There would be no way back."
The Trump Organisation team, sitting in the front row of the public seating area in the committee room, looked completely crestfallen as the final vote was taken.
George Sorial, the man charged by Mr Trump with masterminding the massive development, condemned the decision and claimed the people of Aberdeenshire had been badly let down by their elected councillors.
Asked what message the decision would send to other would-be inward investors, he said: "I think it sends out a devastating message that if you want to do big business, don't do it in the North-east of Scotland.
"Obviously, we are very disappointed. It is our position that the council has failed to adequately represent the voice and opinion of the people of Aberdeen and the shire who are ultimately the losers here.
"I think the councillors who felt that by this decision they would attempt to strong-arm us and use that as a negotiating point were gravely mistaken. I don't think an appeal should be assumed. And I think the councillors that erred on the side of caution, assuming we would appeal, have made a very poor decision and I think history will reflect very badly on them."
Mr Trump was not available for comment at his Trump Tower headquarters in New York last night. But a spokeswoman for him said: "We are surprised by the decision. It would have been a great development.
"We are considering an appeal and also considering doing something very spectacular in another location. Sadly, it will not be in Scotland."
At the heart of the committee's decision to reject the outline planning application was the Trump plan to build half the main championship course on a "unique" dune system that has been designated as a site of special scientific interest, and the proposal to build 500 luxury homes on the 1,400 acre site.
The resort would also have included a five-star hotel with 450 bedrooms and nearly 1,000 timeshare apartments.
Many councillors said they hoped that by rejecting the application, it would pave the way for meaningful negotiations to address the environmental and housing impact of the scheme.
But Mr Sorial insisted neither had ever been up for negotiation, and he warned: "I think we have been very frank all along - we do have options elsewhere in the UK and we will sit down now and take a look at that, but we haven't made any formal decision yet. Ultimately we can go and develop the project somewhere else."
There was divided reaction to the committee's decision, with local business leaders expressing outrage, while environmental groups and local protesters praised the councillors.
Patrick Machray, chairman of the Aberdeen City and Shire Economic Forum, said it was a blow to his group's vision for the area's long-term prosperity.
Kate Dean, the leader of Aberdeen City Council, said: "This was a golden opportunity to make the North-east of Scotland the No 1 place for golf tourism, which worldwide is worth hundreds of millions of pounds a year. It is beyond belief that such a short-sighted decision could have been made."
But the decision was praised by conservationists. RSPB Scotland said: "We are delighted that the destruction of part of Aberdeenshire's beautiful unspoilt coastline has been recognised as too high a price to pay for this development."
A spokeswoman for the Scottish Wildlife Trust also applauded the decision. She said: "The proposal would have seen the destruction of a one of the most spectacular dune habitats in Scotland."
• COUNCILLORS were split, with seven on each side of the argument, as they debated the planning application for Donald Trump's golf resort.
Alastair Ross, the Liberal Democrat member for Huntly, moved it should be refused. He claimed the committee was being asked to ignore planning rules to build 500 homes "for the rich" at a time when the council was struggling to supply desperately needed affordable homes for local residents.
"It is an economic investment - it is property speculation," he said.
He argued the council should play "hard ball" with the Trump Organisation to secure a development acceptable to the council, adding: "We are open for business, but we have to do business that is good for Aberdeenshire - not at any price."
Marcus Humphrey, a Conservative councillor from Deeside, said: "We highly value our natural heritage and, as a creator of a national nature reserve myself, I know how important it is that we act as guardians of this spectacular heritage for future generations.
"This application involves the stabilisation of a dynamic sand-dune system which has been designated as an SSSI [site of special scientific interest] for statutory protection. The system would have to be stabilised and grassed over.
"The proposals for 500 executive houses should be rejected because of the huge strain they would put on services ... we simply cannot have one law for individual small developments and another for a big development."
He went on: "I have no objection whatever to the principle of a golf course and its associated hotel and leisure facilities. But just because a particularly beautiful piece of coastline has attracted a developer is no reason why it should be developed."
However, Albert Howie, the independent councillor for Central Buchan, said the local authority had to grasp the opportunity of attracting such a prestigious development to the North-east.
He said: "A golf course is a beautiful thing. They are an improvement to what, to me, is wasteland.
"Let us embrace this tremendous project with enthusiasm. The rest of the world would think we were mad if we turn this down."
He was backed by John Cox, the Independent councillor for Banff and Buchan, who said: "Closing the door is going to send out the wrong signal. We shouldn't get hung up on historic policies."