A council in south west Wales has lost a bid for a High Court injunction to temporarily block plans to use a four-star hotel to accommodate asylum seeker families.

At a hearing on Friday, Carmarthenshire County Council failed to secure an interim order preventing migrants being placed at the Stradey Park Hotel in Llanelli while their asylum claims are processed by the Home Office.

The local authority claimed proposals to house up to 241 people at the 77-bed site that hosts “major stars” from TV and film, represented a “material change of use from a hotel to a hostel” and would be a “breach of planning control”.

The housing of migrants at Llanelli’s largest hotel by bed space, due to take effect from Monday, “would undoubtedly cause harm” to the local economy, the council’s lawyers argued.

This included potentially losing more than 25% of the town’s hotel rooms, job losses, cancelled weddings and an impact on tourism, a judge at the High Court in London heard.

But a lawyer for Stradey Park’s owner, Gryphon Leisure Limited, opposed the bid to prevent it helping with a “clear, pressing and urgent need” for asylum seeker initial accommodation, arguing there would be no breach of planning rules.

The court was told that Gryphon director Robert Horwood had warned that, without the “injection of funds” from a contract with accommodation provider Clearsprings Ready Homes Limited, there was “a serious risk that the use as a hotel would be lost in any event”.

Judge Gavin Mansfield KC dismissed the injunction bid and will give his reasons at a further hearing on Monday afternoon.

Craig Howell Williams KC, for the council, told Friday’s hearing that it was “well aware of the pressures on the Home Office” over housing migrants but there was a lack of information over efforts to find alternatives to Stradey Park.

He said the “unique” hotel, a former Edwardian stately home, was “at the height of luxury end” of the market and played a “fundamental role for the tourism sector” due to its spa facilities, restaurant, proximity to a golf course and stadium and use by film crews.

The barrister said the hotel was “busy and well used” and that there were “good reasons to doubt” Mr Horwood’s claims that the business would have to close down and enter bankruptcy if an injunction was made.

Mr Howell Williams said couples had “recorded their disappointment” over weddings being moved to another venue amid 40 celebrations being cancelled, while there were also fears over the impact on the 85 people employed at the hotel.

In written arguments, the council’s lawyer said there was limited information over how the site will be operated for migrants, with plans for one family per room, catering and security.

The use of bodyguards and perimeter patrols at other asylum seeker hotels was “alien to a residential neighbourhood”, Mr Howell Williams said.

He added that the council had “serious concerns” over “the strength of communal feeling in the locality against the proposed use which has ‘already manifested itself in unauthorised action at the entrance into the hotel’”.

Mr Howell Williams said concerns also covered the “potential for unrest within the community”, the impact on “social cohesion”, as well as on the police, schools and health service.

Jenny Wigley KC, for Clearsprings, Gryphon, Mr Horwood and his co-director Gareth Street, said in written arguments that using the hotel was “a temporary solution of last resort to the immediate emergency crisis caused by the unprecedented numbers of asylum seekers currently entering the country”.

She said Clearsprings, contracted by the Home Office, had responsibility to house some 48,000 asylum seekers, and was working with 225 hotels in the south of England and Wales.

The provider had to house around 800 to 1,000 new asylum seekers per month, with Stradey Park being “the only hotel available for new arrivals over the next seven days”, Ms Wigley said.

She added that if people were not accommodated “it would lead to the risk of asylum seekers being kept for longer in sub-standard, overcrowded conditions in facilities such as the Manston Centre, or in the worst-case scenario being made homeless”.

Ms Wigley said the number of asylum-seekers needing accommodation was “at record level”, adding that “the lives, health and wellbeing of large numbers of people are directly impacted by the lack of space at existing facilities”.

She said there would be “no physical alterations” to the hotel, adding that “the actual day-to-day use of the hotel by asylum seekers is largely indistinguishable from the use of a hotel by other guests”.

Ms Wigley said in court that “a handful of staff have been retained” at the hotel, adding that there was dispute over the causes of this, including over the impact of “negative publicity”.

The Carmarthenshire case comes after the Government lodged a bid to take a legal battle over its Rwanda asylum seeker deportation policy to the Supreme Court.

In June, Braintree District Council lost a Court of Appeal challenge over plans to house asylum seekers at Wethersfield Airfield in Essex.

In May, West Lindsey District Council lost its bid for a High Court injunction over placing migrants at the RAF Scampton base in Lincolnshire.

In January, East Lindsey District Council became the latest authority to consider legal action over using hotels for asylum seekers, which has already been pursued by Fenland District Council, in Cambridgeshire; North Northamptonshire Council; East Riding of Yorkshire Council; Stoke City Council; and Ipswich Borough Council.

Some have had their claims dismissed, but successful legal action pursued by Great Yarmouth Borough Council, in Norfolk, saw a High Court judge rule that seafront hotels there could not be used to house migrants.