The university expressed in a statement "deep regret" in the decision of the Town Planning Board, saying the proposed site was the best available for the campus' further development.

To Yiu-ming, a spokesman for the university's faculty union, said: "Keeping the site for educational purpose, like reserving it for a Chinese medicine teaching hospital, will benefit the general public more than reserving it for luxury flats."

To said the university must come up with a more concrete plan to convince the public and Town Planning Board, including whether the hospital would offer cut-price consultation fees.

However, in a statement submitted to the board, the government said that it was not necessary to have a teaching hospital close to the campus.

The northern portion of the site, which was still reserved for the university, should be able to satisfy its future demands for student accommodation, it said.

Students and academic staff, including Baptist University president Albert Chan Sun-chi, are united in opposing the government's plan to rezone the southern site for flats.

Over 350 students petitioned overnight on Thursday at the government headquarters in Tamar before heading to the board's North Point offices, where their numbers grew.

"If the government does not want to give us the site, then the site should be opened to all universities to compete for," said the university's student union president, Wong Hok-kan.

A board spokeswoman said most members thought residential development was compatible with the surrounding environment, and the public had two months to express their views.

The site is one of the 36 GIC sites - designated for government, institute and community use - picked by the new government for rezoning in order to relieve the acute housing demands.