Marton Moss will be protected from future large-scale housing development after town hall leaders voted to block the bulldozers.
Prior to 2010, the Moss had been earmarked for 2,700 homes which caused an outcry and sparked a campaign to preserve the semi-rural nature of the area.
Existing planning approvals for around 667 houses on land to the north of Progress Way will not be affected.
But building to the south of Progress Way up to School Road, will be restricted in future.
Marton Moss was at the centre of a huge political controversy prior to the 2010 General Election when Kensington Developments donated £10,000 to the election war chest of Conservative candidate Ron Bell after applying for planning permission to build houses on the Moss.
The money was later returned after a probe by the Electoral Commission.
At the time, the Conservatives were in power.
Their group leader Coun Tony Williams said his party would support the updated plan.
But council leader Coun Simon Blackburn told a full meeting of the council on Wednesday that the new plan was “dramatically different” to the one put forward by the Tories when they were in control.
He said: “This core strategy which you all say you are going to support looks dramatically different from the core strategy we inherited from you.
“This says quite clearly, there will be no further large scale building on Marton Moss.
“You all remember the brown envelopes, the planning meetings, the interesting relationships with big developers. There is none of that in this plan.
“What they are actually supporting is a major turnaround in planning policy.”
Conservative councillor Maxine Callow reacted furiously to Coun Blackburn’s comments.
She said: “I have never taken money from anybody during my political career and take great exception to this.
“You have made a sweeping statement and pointed the finger.”
The Blackpool South Conservative Association paid the money back to Kensington Developments in 2009 following an inquiry by the North West region of Conservatives.
While their findings showed the cash had been properly reported to the Electoral Commission “in accordance with all legal requirements” it was paid back to ensure there was complete transparency.
News of the two £5,000 donations, the first of which was handed to the association in July 2008 and the second in May 2009, caused outrage among campaigners against plans to build the houses on land off Moss House Lane.
Leaders at the then Conservative-controlled Blackpool Council had also demanded the cash be paid back.
The new policy is among two main changes to Blackpool’s core strategy - a document setting out development priorities for the next 13 years.
The other main change is a watered down approach to managing the holiday areas.
A need to reduce the amount of holiday accommodation is still recognised, but there will be more opportunity to review policies.
The updated planning document says Marton Moss can be protected from further house-building because not as many houses need to be built in Blackpool - the requirement has dropped from an average of 300 a year, to 280 a year, between now and 2027.
These will be built on inner areas and include major developments at Rigby Road and Queens Park. Another 150 homes are designated for land at Whyndyke Farm, while conversions and ‘windfall sites’ make up the rest of the house-building requirement.
A neighbourhood planning approach will be taken to Marton Moss instead involving more consultation with residents.
There was anger when Kensington Developments was granted planning permission in 2010 for 584 homes on land off Moss House Road, part of Marton Moss.
Approval has also been since granted for 83 homes at Runnell Farm, also on the Moss.
Blackpool South MP Gordon Marsden welcomed the council’s decision to update the strategy.
He said: “It is really important the council makes this sort of commitment to our green spaces and particularly to the remaining areas around Marton Moss.
“What we also need is a thoughtful and pro-active strategy for how this precious green area is used. I have suggested in the past eco-leisure tourism.”
Angelia Hinds, of the Save the Moss Campaign, said: “There are many brownfield sites around Blackpool now available for the council to bring forward and that’s what we need to do.
“There won’t be any green space left if they allow further development, especially with developments in Fylde around Whitehills.
“The policy holds a lot more weight now it has been signed off in the core strategy.”
Consultation on the draft core strategy will start on July 4 for eight weeks, followed by examination by a planning inspector next spring, after which it is hoped the new plan will be formally adopted in September 2015.
The core strategy is the framework for all local planning decisions and gives the council the power to refuse planning applications which contravene its adopted policies.