Councillors have called for more power to bring land set aside for jobs onto the market amid claims developers are targeting the sites for 'windfall' housing.
Concerns were raised as members of East Lothian Council's planning committee were asked to decide a planning application for 195 homes on nearly 9 hectares of agricultural land earmarked in their own Local Development Plan (LDP)for employment use.
House developers Mactaggart and Mickel claimed the land at Windygoul, Tranent, was not 'commercially viable' adding that there was an over provision of employment land available in East Lothian.
READ MORE: East Lothian town's cemetery 'too full' to cope with new housing
A report to the committee from planners said the developers had said it was "highly unlikely that this site will be developed for commercial property uses".
It was suggested the location was not right and there was an excess of other sites more suited to its use available.
However Councillor John McMillan, the administration's economic development spokesperson, said the council's economic strategy is to encourage the increase of jobs in the county.
And ward councillor Lee-Anne Menzies, pointed out the county's second biggest employer Charles River operates directly next to the site.
She asked how the site could be described as unsuitable when "our second biggest employer sits right next door."
Committee members were recommended to refuse the application by planning officers who said it was an unacceptable loss of employment land and developers had refused to pay a contribution towards sports facilities at the site if given the go ahead.
Tranent and Elphinstone Community Council objected to the plans saying public services in the town could not cope with the extra housing - adding that even the cemetery was full.
Councillor Colin McGinn described the developers refusal to pay a contribution requested by planning officers of nearly £250,000 towards sports facilities on the site as 'disconcerting' - however Bruce Hampton from Mactaggart and Mickel said they were not against paying a sporting contribution but disputed the amount.
Mr McGinn said: "I am concerned about the nature of this application, my personal opinion is it is a speculative application designed to override the current local development plan.
"It aims to push land identified as employment land towards a much more profitable and lucrative model which emphasises my point in the debate over sports provision.
"There is a fundamental issue here and we are going to see other application of this nature come forward and we need to take some further action.
"We need to write to the Scottish Government to discuss how we and other local authorities maintain control of these areas of land identified under our LDPs.
"If we don't get permission to take control of this we are in danger of losing land which is earmarked for employment."
Planning convenor and council leader Norman Hampshire said allowing more housing on land which was not already set aside for residential development in the county would 'break' the council.
He said: "We are now in the situation in East Lothian where the landowners and developers who own the site we have allocation for economic development are not bringing them forward.
"They are not putting in the infrastructure in required for economic development to take place, so we have ended up with lots of green fields and no economic development.
"We need more power to be given to this council to allow us to bring these sites forward and make sure there is availability for new businesses and expanding businesses to stay within the county.
"If this application was to go through the planning system would be broken.
"We are at a max as far as new build in East Lothian. We cannot afford to build any new developments over and above what is in the LDP because the cost of delivering that would break the bank within East Lothian Council."
The committee unanimously agreed the council leader should write to the Scottish Government and to refuse planning permission for the housing.
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