Hundreds of new homes could still be built in Horncastle after the Government rejected East Lindsey District Council’s key planning strategy.
ELDC had submitted its Core Strategy which will cover the next will 15 years.
It identified how many new homes can be built - and specific locations for development.
However, a Government inspector has refused to accept the proposals and effectively ordered ELDC’s planners back to the drawing board.
It will be Spring before ELDC can re-submit their plan.
That has sparked fears developers will rush through even more applications - before any limits are introduced.
The news comes just days after ELDC rejected a scheme for 300 new homes at Langton Hill, Horncastle
However, there are still plans for almost 300 homes to be built at other town locations - with others thought to be in the pipeline.
In an exclusive interview with the News, ELDC’s deputy leader Coun Craig Leyland pointed the finger of blame for the delay at the Government.
He accused the Governmenet of ‘shifting the goalposts’ and warned ELDC was under increasing pressure to accommodate thousands of extra new homes.
Coun Leyland said: “The Government’s advice throughout this has been at best confusing and at worst lax.”
That, in turn, brought a stinging response from Coun Richard Barker, the chairman of Horncastle Town Council’s planning committee.
He said ELDC had now had two core strategy proposals refused by the Government and called for a two-day conference of all interested parties to avoid any further rejections.
Coun Leyland, whose portfolio includes planning, revealed the Government inspector had raised several concerns about details in the Core Strategy - including a lack of provision for travellers’ and gypsy sites.
He also confirmed the inspector ruled ELDC had ‘under-estimated’ the number of houses that could be built.
Coun Leyland explained the Goverment was keen to see a big rise in housebuilding nationally and all local authorities were under pressure to increase their allocation.
He added: “One of the problems is the final numbers are based on the economic position of the country.
“When we started this process, there was a recession which is no longer the case.
“As a result, the Goverment wants to see even more houses built.
“That is why the goalposts keep moving. We could agreed a figure now - but that would incease even more - if the recovery continues.
“I have gone eye-to-eye with the inspector and asked questions like where all the jobs will come from to support all these new homes.
“However, I was told in no uncertain terms that is not an issue - and not part of the process.”
It is thought inland communities like Horncastle and Woodhall Spa could come under pressure to ‘soak up’ any extra homes.
Coun Barker said: “ELDC got its Core Strategy wrong 12 months ago and now it’s got it wrong again.
“That’s 12 months down the drain. It is simply not good enough.
“As for recovering from the recession, it may be the case south of Watford but I wonder if anyone from the Government has bothered to look at what is happening here?”