An estate of more than 200 homes will be built on the border of Gawthorpe after councillors reluctantly approved a masterplan for the scheme.
Stirling Investment Properties LLP and Scotfield Ltd are looking to build the estate on Owl Lane, next to the Dewsbury Rams’ Tetley’s Stadium.
But Kirklees Council’s cabinet admitted that their hands were tied due to a deal they struck with the rugby club and developers in 2008.
The development would include a new car park and training pitch for the Rams, who would also receive cash, believed to be a six-figure sum, to help with the club’s running costs and community projects.
But councillors said they had no choice but to approve the scheme because they had given the Rams use of the land on a 999-year lease.
Coun Kath Pinnock said: “The way this agreement was made, it feels like the developers have us over a barrel.
“I am not against helping the Dewsbury Rams, but I would have preferred to have looked at other options than building houses on greenbelt land without proper consultation.”
Ossett councillor Tony Richardson said the new development could result in increased traffic around the Gawthorpe area.
But people living nearby will have to wait until a further planning application is submitted to have their say.
But Rams chairman Mark Sawyer said the scheme would help to secure the club’s future for years to come.
He said: “As part of the agreement, we would get a new car park and training pitch which will be funded by the developers, but we would also receive a substantial amount of money from them to reinvest in the club.
“Part of the sum would go towards running costs, but the majority will be put into a Dewsbury Rams trust, which will help fund our youth set-up and community projects.”
In 2011 thousands of protestors, including those from Gawthorpe, marched to show their opposition to plans for 500 homes on another site nearby, on Leeds Road.
The plans are part of Kirklees Council’s Local Development Framework(LDF) and infuriated Gawthorpe residents who were worried about the impact on green belt land and of increased traffic on the village.
But councillors voted to adopt the LDF and it is currently in the hands of a government inspector awaiting a final decision.
Sites on Horbury Road and Storrs Hill Road have also been allocated for housing as part of Wakefield Council’s LDF, which was approved at the end of last year.