NEW YORK (CNN/Money) - In what seemed like a win for Wal-Mart, voters in Bennington, Vt., rejected a bylaw limiting the size of large-scale retail in a special referendum, a newspaper report said Wednesday.

The bylaw adopted by the town's select board in January was voted down Tuesday 2,189 to 1,724, the Bennington Banner reported, the latest chapter in the town's heated battle over big-box retail that drew a surprisingly large crowd to the polls.

Select board members must now go back to the drawing board to rework regulations that limit retail store sizes to 75,000 square feet and require an impact study for any development of more than 30,000 square feet, the newspaper said.

"We're very pleased (the people of Bennington) voted the way they did," Wal-Mart developer Jonathan Levy told the Banner.

Levy led a petition campaign to send the bylaw to a townwide vote after his plan to double the size of Bennington's current 50,000-square-foot Wal-Mart was rejected under the interim regulations, according to the report. He will now continue to push for a 112,000-square-foot store, the newspaper said.

Some who rejected the bylaw cited a need for jobs, adding that they currently drive to megastores outside of Vermont to shop, the report said.

"I drive an hour to go to the big-box stores in other states. Why spend the money there?" Ralph Becker Jr., 49, told the newspaper.

But Dan and Barbara Geer, who have lived in the same house in Bennington for 46 years, voted to keep the bylaw, the Banner said. Barbara Geer told the newspaper, "I support the idea of the select board keeping Bennington available to smaller businesses and not turning it over to big stores to take business away.

"We love Bennington and would like it not to become another New Jersey."

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