Redstart Construction Limited and Matrix Construction built 43 units at the Tern Valley Business Park just outside Market Drayton over several years but this summer the council ended its contract for further work at the site and said it was "exploring its options" for the next stage.
Now Redstart has claimed that the council breached their agreement, and has hit out at the "crazy" decision and called it "legally, morally and economically wrong".
James Evans of Halls GB surveyors worked with the builders on the development.
He said: "My clients Matrix Construction and Redstart were appointed developers of this site when no other party was interested after open tendering by the council a few years ago.
"The market has not been the easiest and Market Drayton has had its difficulties but against these circumstances my clients have successfully constructed 43 units at the business park and created over 140 jobs – all this done at their own commercial risk without any grant assistance.
"During the development of this part of the site we had established a commercial unit model that worked and the demand outweighed the supply which was fantastic. Therefore an application for the development of 39 further units was submitted on March 22, 2019 by my clients to Shropshire Council.
"Shropshire Council accepted the application and the application fee which is significant cost, being circa £50,000 to my clients.
"The council were fully aware of the success that the development was having and the further significant investment that was being made in Market Drayton.
"We pressed for progress on both the planning and legal matters through the months of March, April, May and June. The council cancelled numerous meetings to meet and discuss this matter.
"In June 2019 my clients and I were requested to attend a meeting with the head of economic development and [Shropshire Council's portfolio holder for economic growth] Steve Charmley where we were told the contract between my clients and the council had expired and they would not be renewing it.
"So the council have accepted the planning fee in March, dragged the legals on the land and were now telling us this. This was crazy, even without considering the fact all the units were sold or let and the huge benefits to Market Drayton."
Mr Evans said there were further meetings with the council, with the developers trying to convince them to reconsider.
"Again the points were outlined to the council and how wrong this had to be legally, morally and economically.
"The council have no current definitive idea for the land. My clients have a massive exposure on costs, Market Drayton has lost out and no one seems to want to give an answer."
'Salt in a wound'
He said that recent claims from a council report that development at the business park had been slow were "rubbing salt into a wound".
Chris Detheridge of Wace Morgan Solicitors is representing the builders. He confirmed that Redstart is pursuing a legal claim for breach of contract against the council.
Shropshire Council was asked to comment on Redstart's concerns.
A spokesman for the council said: “Shropshire Council is aware of the concerns raised by Redstart. This is a matter between the two parties and we are not in a position to comment at this time.”