The Lower Mountains has been saved from threatened overdevelopment, with plans to include areas up to Faulconbridge as part of Sydney's "metropolitan urban area" abandoned.
The government's Metropolitan Strategy has decided that urban Sydney will now officially end at Emu Heights and Leonay, leaving the areas west from Lapstone as part of the "metropolitan rural area".
The news was greeted with cheer and relief by those who had opposed the plan.
Blue Mountains Conservation Society president, Alan Page, said that it was a "sensible decision which we welcome".
The society had lobbied hard after a draft plan proposed spreading Sydney's sprawl as far west as Faulconbridge, raising the spectre of heavy density development in the Lower Mountains.
The society organised a rally 18 months ago to voice its protest and Mr Page said it was "pleasing" the concerns raised there had been heard.
"Opening up the Lower Mountains to thousands of additional dwellings would have threatened the unique character of a city within a world heritage area - we are not simply another suburb of Sydney.
"The society will remain vigilant to make sure that the changes really do protect our environment and mountains' way of life," he said.
Labor candidate for Blue Mountains, Trish Doyle, said the backdown would be a relief for Blue Mountains residents.
"I don't believe anyone here wanted urban sprawl and development spreading into the Mountains," she said. "This is a significant victory on an issue that should never even have been contemplated, and the credit goes to all those who so vigorously made representations to the State Government on this matter."
She particularly praised the conservation society for its work.
"While this has given the Mountains a reprieve for the next 20 years, what we now need is a commitment from the Liberals that they will never contemplate such development plans ever again," Ms Doyle said.
State MP Roza Sage said she was delighted the government had listened to the community's input on the issue.
"From a practical perspective there is very little land for any greenfield development as available in other growth areas," she said.
"I advocated strongly to the minister that the urban area not include these parts of the Mountains and to have that confirmed is great news.
"Having joined the community at a number of workshops held during the consultation period, the department made it quite clear at that time that it was unlikely the Lower Mountains would remain within the urban area."
The mayor, Mark Greenhill, also welcomed the news.
He had warned that up to 7000 new dwellings might be slated for the Lapstone to Faulconbridge stretch if the "urban" classification had remained.
"This is great news. Council campaigned hard against this, including making strongly argued submissions.
"However, we cannot be complacent. Our LEP draft is still with the Planning Department and we hope they will preserve our sound protections," Clr Greenhill said.
The strategy can be viewed online at www.strategy.planning.nsw.gov.au/sydney/.
