Jean Nouvel’s long-running bid to renovate and expand Geneva’s Museum of Art and History has received what appears to be a fatal blow after his plans were narrowly rejected in a public vote.

Despite receiving planning approval and funding, the 131m CHF (US$129m, €120m, £93.4m) project to refresh Marc Camoletti’s 1910 neoclassical landmark faced a local referendum after criticism from campaigners.

According to Swiss reports, 54 per cent of voters called for the plans to be dropped.

In a statement, the Administrative Council of the City of Geneva said: “We regret that a funded project, which benefited from third party contributions of more than 50 per cent, has been buried.”

The body blasted opponents of the campaign for spreading “anti-truths” about the project and insisted that the expansion must go ahead in some form despite “heated exchanges” over its future.

Nouvel had planned to create new mezzanine and basement spaces within the building’s old walls to add 7,00sq m (75,300sq ft) in additional floor area. A restaurant was also to be added to the top floor – a factor which also angered campaigners.

The museum’s board has always insisted that Nouvel’s Design, which was originated a decade ago, was “extremely faithful to the spirit of the existing building”, but opponents have hit out at the scale and cost of the renovation.

Writing in 2009, Pierre Vaisse, an Architecture critic and art professor at the University of Geneva, said the project would “irreparably damage a building which, except for the lack of space, responds perfectly to its intended function by its layout, elevations and treatment of light.”

The Administrative Council has declared it will now press on with the expansion plans, albeit in a different guise.

“The goal is to successfully overcome divisions and to carry out the renovation and expansion needed for a building whose condition is worrying and does not meet what is expected of a museum of the 21st century,” it said.

The council will work with “consultants and stakeholders” to propose a new expansion scheme for the museum, opening the door for architects and designers to step forward with new ideas.

Private funding for Nouvel’s project had been provided by the Gandur Foundation for Art, several of Geneva’s watchmaking factories and the Göhner Foundation.