These would-be forest dwellers snapped up land approved for housing in the early 1980s by the government of Joh Bjelke-Petersen, the right-wing maverick who ruled Queensland for 19 years. The move went ahead despite massive opposition, and the land was excluded from 9,000sq km of rainforest that were World Heritage listed in 1988.

For the past two decades, the 1,000 or so blocks have been a battleground between conservationists keen to preserve the Daintree's unique ecosystems and landowners set on building homes in a region internationally renowned for its natural beauty.

Now, after years of wrangling, Douglas Shire Council has banned all further development in the area, which borders the World Heritage listed wetlands. "The reason that we've had to take some divisive and uncomfortable action is because it's been allowed to develop to the point of no return, " said the mayor, Mike Berwick. "It was either let it urbanise, and turn it into a leafy suburb, or conserve it." The council is prepared to buy back land for market prices. But the move was greeted with dismay by landowners, many of whom had yet to build on their blocks, or were planning to renovate properties. Some argue that if shire councillors really want to preserve the Daintree, they should limit tourism, which accounts for 85% of the local economy.

The rainforest occupies a stretch of land between the Great Barrier Reef and the coastal mountain range, fringing the white sand beaches and almost merging with the coral reefs that lie just offshore.

It is said to contain an almost complete record of the major stages in the evolution of plant life on Earth.

It also provides the sole habitat for many rare plants and animals, including the endangered southern cassowary, a large flightless bird.

Two years ago, Douglas Shire introduced a similar ban, which was overturned by pro-development councillors while Mr Berwick was absent following an accident on his property. It was then reinstated by the state government, which has been Labour for many years. Mr Berwick, who in his youth led an unsuccessful campaign to prevent a track from being bulldozed through the Daintree, says the latest decision is final.

Anti-developers were bolstered by a letter written to the prime minister, John Howard, and the Queensland premier, Peter Beattie, in 2004 by 23 environmental scientists from around the world, including institutions in Britain and the US. They warned that full settlement and development of the residential blocks would "decimate both the region's bio-diversity and the thriving tourism industry founded on this area."

Until now, settlement has been only patchy, because the land has no amenities, including sewage or power, and could only be reached via a ferry that crosses the crocodileinfested Daintree River. Many residents, however, are outraged by the building ban. Some have threatened to launch a class action against Douglas Shire.

Tina Mrozek, who bought a block south of Cape Tribulation more than two years ago, was intending to renovate a house in which she lives with her elderly mother. "I was already in the process of development, and now I'm a criminal, " she told ABC radio. "I'm staying where I am, and they can physically remove Mum and I if they so desire."