Mr Osborne said: “What we are doing is to ask for confirmation that any of those things are lawful uses that can be done without planning permission.
About 60 residents from the area surrounding the prison attended the meeting, cheering when it was turned down.
Under the “C2A secure residential institution” planning class, the building could be used as a prison, young offenders’ institution, detention centre, secure training centre, custody centre, short-term holding centre, secure hospital, secure local authority accommodation or military barracks.
Mr Osborne, who previously completed a project to turn the former Oxford prison into a luxury hotel, said: “I have yet to have suggestions for what the Dana can be used for as an alternative to the application that was put forward.
The property developer’s request comes after his plans for the site were thrown out by Shropshire Council’s central planning committee last month.
He said: “We have not been looking because we were expecting to develop it in accordance with the planning application which was refused. We are now interested if these uses are legal and when we know we will seek to decide.”