The Delaware and Raritan Canal Commission’s rejection last week of the Institute for Advanced Study’s plan for faculty housing marks “a major, major setback” for the organization, according to the attorney representing the Princeton Battlefield Area Preservation Society, which opposes the plan.

But a spokesperson for the Institute, which seeks to build eight townhouses and seven single family homes on land the Battlefield Society believes was pivotal during the Revolutionary War, said the ruling will be overcome. “We’re considering all of our options,” said Senior Public Affairs Officer Christine Ferrara, last Friday. “I don’t have an answer yet, but we’re looking at everything. We indeed do believe that this won’t be an obstacle.”

The Institute’s plan for faculty housing was the subject of much controversy before it was unanimously approved in March 2012 by the Princeton Regional Planning Board with one condition С approval by the D&R Canal Commission, which protects the park by reviewing development proposals.

“At the moment, this leaves them with no approval to build on the Battlefield,” said Bruce Afran, the Society’s attorney. “At present, the plan is dead. They have very few appeal prospects. They can appeal in theory, but the courts don’t set aside expert agencies’s decisions.”

The Commission, which voted 4-3 last Thursday against the plan, administers a land-use regulatory program within the area where new development could have drainage, visual or other ecological impact on the Canal Park. The area within which there could be a drainage impact is almost 400 square miles, including parts of Mercer, Hunterdon, Somerset, Middlesex and Monmouth counties, according to the Commission’s website.

Projects that involve an acre or more of impervious surface as of 1980 must meet the Commission’s standards for managing storm water runoff.

“The Planning Board’s approval for this is now void,” Mr. Afran said. “If they have any chance of doing this they have to start over from scratch.”

Responding to a story on the website Planet Princeton in which Ms. Ferrara was quoted as calling the vote a technical issue, Mr. Afran said, “It’s not a technical  issue. The approval was an essential part of the Planning Board’s decision. Without that, they can’t go forward because they intrude into a state protected stream corridor. The plan is actually invalid, because it intrudes into a protected environmental zone and the state says they can’t do it.”