The firm's designs faced intense opposition from Fatboy Slim - otherwise known as Norman Cook - and his fellow campaigners, who have fought to save a 1930s art deco building set to be demolished to make way for the scheme.
The original project proposed a 12-storey mixed-use building providing 98 apartments, which included 30 affordable homes, ground-floor offices, and five terraced town-houses.
The scheme was rejected, and developer Berkeley Homes re-submitted planning applications for the project.
The second set of plans slashed the main building to six storeys, cut the number of flats from 98 to 70, and increased the amount of affordable housing.
However, the plans were thrown out for a second time due to pressure from Fatboy and the campaign group.
The DJ previously said in the local press how fond he was of the 1930s art deco Caffyn's building, and how he didn't like the idea of modern office blocks going up on the sea front.
A spokesman from developer Berkeley Homes said: 'The scheme was scrapped because the council deemed it to be too grand in scale. They said it was too high, and would result in a loss of privacy to local residents.'