The Montgomery County Council has rejected a bid by the village of Friendship Heights to become an independent municipality and expand its borders to include some of the area's most valuable real estate.

The 8 to 0 vote by the council this week sets back the village's decade-long effort to change its status from a special taxing district to an incorporated area that would no longer need County Council approval of its laws.

Although many council members have said they understand the village's desire for greater independence, they expressed skepticism about the community's effort to absorb the neighboring Geico insurance complex, the Woodward & Lothrop store and the exclusive Somerset House condominium. Those businesses and many of the condominium residents have fought the village's plan, complaining that as part of an independent Friendship Heights they would pay higher property taxes but receive no new benefits.

"Justice was served," said Sheldon Fischer, president of the Somerset House Condominium Association and a fierce critic of the village's plan. "They would have given us nothing. We live in Somerset House because it gives us everything we need."

Alfred Muller, chairman of the Friendship Heights Village Council, said such properties would fit in naturally with an independent Friendship Heights, adding that making them part of the village would have lowered property tax rates for current residents.

The County Council's Tuesday vote blocks a referendum on whether the high-rise village should become independent. The Montgomery County Planning Board also has opposed incorporation, saying such a move could hinder the agency's ability to regulate development in that central business district.

Muller said he intends to pursue incorporation for the community of 5,000 residents. "It was a geographic and economic and political union that made sense, and the people should decide," he said.

Muller added that he still may try to link the Geico property and its planned expansion to the village's effort to incorporate. In recent months, Muller offered to drop a Friendship Heights lawsuit attempting to bar Geico from further construction if the insurance company agrees to become part of Friendship village.

"I'm trying to get rid of that lawsuit," Muller said. "Maybe our incorporation is still the way to do that."