Plans to build 98 homes in Guiseley have been given the go-ahead, despite widespread opposition.
Leeds City Council had refused permission for the Redrow Homes development, on Netherfield Road, but has been overruled by the Planning Inspectorate following a public inquiry.
Guiseley and Rawdon councillors said they were bitterly disappointed.
Councillor Graham Latty (Con) said: “I really did feel there was a possibility for a successful outcome from this inquiry. This doesn’t mean that we will not fight future applications, but we have to admit that in these difficult financial times there is a limit to how much the Council can afford to pay out in legal fees and costs.”
Councillor Pat Latty (Con) said: “I am bitterly disappointed that, despite the wealth of evidence put before the Planning Inspector, he has decided to let this development go ahead in the face of concerns raised by local people.”
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