A controversial housing development is back on the table after scaled-back plans for 400 homes were officially submitted.

Lord Derby’s ambitious plans for Hatchfield Farm in Newmarket have divided the town for years, with an initial application for 1,200 homes on the site rejected by Forest Heath in 2010. An appeal against this decision was turned down last year.

The original plans attracted fierce opposition from the horse racing industry and other local groups, and Newmarket Town Council voted to oppose the new application during a meeting on Monday.

Rachel Hood, a town and district councillor who is also president of the Racehorse Owners Association, was chief among those against the proposals during the council’s debate.

She said: “Newmarket is a town of national and international importance and further urbanisation of the town will be damaging to the core industry. Clearly 400 houses now will mean another four and another four.

“Nobody should be under any illusions – we will end up with the same that we rejected previously. We should be building on brownfield sites and not damaging the industry.”

Fellow councillor Chris Turner told the council’s development and planning panel that from his sample of around 40 people in Newmarket town centre, around 70% said the town needed more housing and that 55% of all respondents wanted it on Hatchfield Farm.

Mr Turner added: “We must have more housing in Newmarket – the issue is where is the best place for it.

“I don’t necessarily agree it’s the thin end of the wedge. Any more would have to come up for planning consultation again.

“It’s a better option than we’ve had before and I would go with the outline application.”

Four councillors voted against the application, with two in favour and two councillors abstaining.

Panel chairman John Berry said: “If 400 houses went up and you had agricultural land lying adjacent to it, you’d have set a precedent.

“It’s whether one views that this will be providing houses for the town or providing houses for Cambridge. My view is we should not be supporting this.”

Among the other reasons for the council’s objection was a lack of infrastructure, such as schools, medical facilities or a police station, and worries over increased traffic, particularly at the A14 and A142 junction.

The new application proposes 120 affordable homes among the 400 properties, as well as funding the installation of traffic lights on all four A14/A142 slip roads. It also proposes phasing in the building work at a rate of 50 houses a year.

The planning statement reads: “This is a proposal which is designed to balance the need to avoid prejudice to the continued success of the horse racing industry in Newmarket whilst also providing much needed homes in the largest town in Forest Heath.”

Forest Heath councillors will determine the application before January 3.