Odiham Parochial Church Council wants to hand the Cross Barn back to Hart Council for a nominal £1 after failing to get its annual public entertainment licence (PEL) renewed following complaints from some residents.
The licence — normally granted "on the nod" — is essential for any community hall wanting to stage functions that are open to the public and include music and dancing.
The PCC assured Hart Council's licensing committee there would be no change to the Cross Barn's use of the last few years and pointed out that there would be no bookings in the future for wedding parties so there was likely to be even less noise.
But the committee refused to grant the PEL following a string of written complaints from nearby residents, who claimed it could result in increased noise and disturbance.
The PCC says it has the option of applying for occasional licences for each of the many hirings involving music or dancing, but this would not be practical.
It added that in view of this "further blow" it had decided to exercise its option contained in the original 1997 deed of transfer and hand the centre back to Hart.
The PCC said that although it has continually managed to please the vast majority of the 500 regular users of the Cross Barn, behind the scenes it has had to deal with a number of problems.
These include parking problems, noise issues, legal threats over covenants, problems on planning applications and an enforcement notice calling for the removal of the play school toy shed resulting in storage problems.
"All the members of the PCC responsible for the Cross Barn are unpaid volunteers but have reached the end of their tether," the PCC states.
One long-standing Odiham resident said he was shocked to hear of the news.
"I feel this is a scandalous state of affairs whereby residents of a small estate can bring such pressure to bear on the local church and its functions within the village," he said.
"When this small estate was built the people who bought the houses were well aware of the purpose that was intended for the Cross Barn and in my opinion they have no good reason to complain.
"To complain about cars being parked there and the fact that there was a small storage shed to house items for the play school is just sheer bloody-mindedness," added the resident.
Hart Council said community events at the Cross Barn will continue.
"For everything other than licensed events it's business as usual," said council leader Robert Benford, who represents Odiham.
"We have been approached by the Odiham PCC to take back responsibility for the Cross Barn and discussions are now beginning.
"In the meantime the community should be assured that between the two organisations we shall maintain existing regular bookings in this important community building."