Two consortia of housebuilders are seeking judicial review of North Hertfordshire District Council's decision not to allocate 330 ha of land west of Stevenage for residential development.
The original decision to allow development was made in 1998 and backed by deputy prime minister John Prescott.
It was taken in the teeth of opposition from environmental groups protesting at encroachment on the London green belt.
The council announced that the area's structural plan would be reviewed last December, after taking legal advice in the summer.
The plan was adopted before the introduction of PPG3 – government planning rules prohibiting greenfield development if suitable brownfield sites were available.
One of the consortia, with plans to develop 70% of the land, is composed of Persimmon, Taylor Woodrow and Bryant Homes. The other 30% is intended for use by the Garden Village Consortium, which comprises Redrow, Wilson Connolly and Leach Homes.
A source close to the consortia said: "We are challenging the legality of their decision to withdraw the plan, full stop. Whether the council is prepared to go all the way to court is difficult to say; it depends how robust it thinks its position is. But we will still proceed with the planning application as usual." Council chief executive Stuart Philp confirmed that legal action had started. He said: "We strongly resist their claim, and will be lodging our response through the courts as soon as possible." The planning application is expected to be submitted within the new few months. It is expected to include infrastructure provision, including public transport, schools, community facilities and affordable housing.
Most of the development comes under the control of North Hertfordshire District Council; 93 ha within Stevenage Borough Council's boundaries. A Stevenage council spokesperson said it was currently proceeding with its local plan, but the development would go ahead in its entirety or not at all.
A consortia spokesman said that any change in the status of the Stevenage site would require the reopening of the county's structural plan in its entirety.
He said: "Housing for this site and any other structural plan changes can only be looked at from a county-wide basis, which would require a whole new direction in thinking."
