Real Madrid’s plan to redevelop its Santiago Bernabeu stadium has encountered a new setback after the city council rejected it in the interest of the public.

The €440m (US$477.9m, £320.7m) development proposal – which includes the installation of a retractable roof, increasing the capacity to 90,000 and building a hotel, shopping centre and underground car park – will only be accepted if the council believes the interest of local citizens will not be adversely affected.

According to Spanish newspaper Marca, Madrid Sustainable Urban Development representative, Jose Manuel Calvo, said that while the council was still open to proposals they had to be “compatible with public interest”.

In February, a High Court of Madrid ruling overturned an earlier approval for the Spanish football club’s ambitious plans, despite the proposal being rubber-stamped in November 2012.

German architects GMP Architekten are behind the design, which includes an LED skin around the stadium acting as a giant television screen. If approved, the work would be expected to take around six years to complete.