It comes after the Government was asked to intervene in the determination of the application over the low number of affordable homes proposed and as protesters staged a demonstration ahead of a planning meeting.
A request has been lodged with the Ministry of Housing, Communities and Local Government, asking Secretary of State Robert Jenrick to take the decision out of Shropshire Council’s hands.
On Tuesday members of Shropshire Council’s southern planning committee said they could not give the green light to the development until more information was provided to justify the low proportion of affordable housing.
Councillors also said concerns over traffic and the capacity of local health services needed to be addressed with the developer, Harworth Group, before they could make a decision on the proposals.
The committee heard impassioned pleas from residents and councillors representing Buildwas, Much Wenlock and surrounding parishes who said the influx of extra vehicles would exacerbate existing traffic problems and the shortage of affordable housing would price locals out of living there.
There would be 50 affordable homes, or five per cent of the total. This is lower than the 20 per cent normally required by council policy for developments in the south of the county.
Much Wenlock deputy mayor Duncan White asked how this was “justified or acceptable”.
He added: “The 20 per cent policy has been in existence for some years and any form of due diligence by a developer must have identified that.”
The town’s mayor and Shropshire councillor Dan Thomas said: “We welcome all the benefits that the re-development of the former Power Station at Buildwas will bring.
“However this application has, in my view, serious failings that will have a seriously detrimental impact on the people of Much Wenlock.”
He and former Much Wenlock councillor David Turner asked the committee to reject the scheme until a fully-costed traffic mitigation measures for the town's Gaskell Arms road junction have been agreed.
Under the application, the developer was proposing to make a £250,000 contribution towards work at the junction to be agreed at a later date.
Councillor Claire Wild, who represents Severn Valley, the ward in which the site sits, also spoke against the application, saying: “I feel very strongly that this application should be refused.
“While we all recognise the need to clean up and redevelop the brownfield part of the site, building on good quality agricultural land should be avoided at all costs.”
But Harworth's planning head Stuart Ashton urged the committee to back the application.
He said: “Very few developers would have the skills, expertise and financial appetite to take on a project of this scale.
“Our aim is to create a new community that’s an attractive place to live, work and enjoy leisure time.
“On a project of this scale and complexity, we are never going to be able to address everyone’s concerns and comments. However, we have tried very hard to create a masterplan which is innovative and addresses the constraints of the site.
“Harworth has a proven track record of developing complex sites and we are excited to start work on the next chapter of the life of this site.”
The scheme for the 340-acre site at Buildwas also includes a retirement village, primary school, shops, a rail link, business, sports and leisure sites.
If approved, Harworth will pay a £16.75 million contribution towards local infrastructure, ringfenced for work directly associated with the development in areas like education and highways.
While no committee members said they were against the principle of developing the site - which is earmarked as a ‘strategic settlement’ in Shropshire Council’s new draft local plan - they said the application as it stood was not satisfactory.
Councillor Andy Boddington said not enough information was provided in the viability assessment for the committee to make a decision on whether to accept such low numbers of “desperately needed” affordable homes.
He said: “We are creating a huge settlement which is basically unaffordable for people who live here.
“That’s a really important planning policy decision and we haven’t seen the evidence for that.”
Councillor Nick Hignett said the developer “should have assessed this viability prior to purchase”.
Head of planning Ian Kilby told members the applicant’s viability assessment had been agreed by an independent expert appointed by the council.
He added that there would be a review every five years and should the scheme prove more profitable than envisaged, the developer would be required to provide extra affordable homes.
Councillor Tony Parsons said the proportion of affordable homes would “penalise the least affluent in our society by depriving them of the right to affordable housing on a scheme of this size”.
Councillor Robert Tindall proposed deferring the application to a future meeting, with more information on viability to be provided to justify the affordable housing figures, as well as more details on the impact on highways and heath services, and this was agreed by committee members.
At the same meeting, councillors approved a separate application for the extraction of 1.9 million tonnes of sand and gravel from the site. This is dependant on approval for the main scheme being granted.
Should the committee decide at a future meeting to grant permission for the development, the Ministry of Housing, Communities and Local Government will decide whether to call-in the application for a final decision to be made by the secretary of state, following concerns raised by a member of the public about the affordable housing provision.