The developer wants to build a range of two, three and four-bedroom houses on the 9.72-hectare site, with a new access road built from Heol Pit-y-Ceiliogod and Beaumaris Way.
A planning report considered by councillors in October last year had recommended the development be approved, pending a section 106 agreement which would have seen Persimmon pay £220,000 towards a residents’ travel scheme to encourage less car use.
This was despite the fact the development was outside the local settlement area.
Faced with strong local opposition, members of the planning committee went against officers’ recommendations and turned the application down.
Councillors are now urging the Welsh Government to back the council and reject the scheme on appeal.
Independent Blackwood councillor Kevin Etheridge has written to Assembly Members for them to put pressure on Welsh Government minister Julie James.
Fellow independent councillor Nigel Dix has also written to Ms James on the issue.
He said: “Speculative planning applications are a serious issue for Blackwood and the Caerphilly basin, both areas have seen a huge increase in speculative housing applications from Persimmon, who I believe have ruthlessly exploited the planning system.
“Caerphilly County Borough has ample brownfield sites that developers are refusing to develop and invest in, as they can make more profit by busting our Local Development Plan, by building on greenfield sites.
“Previously Welsh Government inspectors have found in favour of the applicant, with no regard to the needs of the council’s regeneration strategy or local people.
“This has led to a huge amount of development in the Blackwood and Caerphilly basin area, with the loss of treasured green fields , greater congestion and higher levels of vehicle emissions.
“The council’s regeneration strategy for the ‘northern corridor’ of the borough is dependant on the development of brownfield sites for housing. Bargoed has a reclaimed brownfield site – which is less than a mile from the Blackwood site in Grove Park – that is capable of accommodating up to 500 houses. Yet over the last decade only 50 houses have been built.”