The threat of a Warwickshire village being consumed by new housing has been resurrected amid fears of legal action.

Stratford-on-Avon District Council last week shelved plans for 700 homes in nearby Shottery after being told the town had reached its housing requirements.

But Tory councillors have now drawn up a motion to reserve the proposals in the district plan in an attempt to ward off the threat of legal action from housing developers.

The motion has angered residents who fear putting the plans into reserve, which will guarantee the land is untouched until 2012, brings uncertainty and blight to the village.

Councillor Ron Cockings (Lib Dem Stratford Guild and Hathaway) said: "To leave it in the plan as a reserve really just blights the area.

"We live in an historic tourist town and to have it ringed by so many large developments puts an historic town in the middle of a Milton Keynes and that cannot be right for the future of Stratford."

The original proposals were included in part of the district council's local plan, which was the subject of a public inquiry earlier this year and finalised in a Government inspector's report in June.

But following new housing guidelines, the council was told it did not need to create the extra homes to meet its allocation set by the Government.

Coun Stuart Beese ( Stratford Alveston), leader of the ruling Tory group, who has gathered 15 signatures from fellow members to put forward the latest motion, said council taxpayers would face a seven per cent rise in rates if the local authority was forced to fight a legal challenge.

He said: "If we take it out of the plan completely, there is a strong possibility of the council being challenged legally by developers and if that happens the main core of the whole district plan will fall apart and therefore we will have no plan whatsoever."

Coun Beese said putting the land in strategic reserve would give the local authority "breathing space" with the hope that Government policy changes would prevent it from using the land for housing at all.

He denied he was putting pressure on his fellow party members despite three Conservative councillors voting to remove the scheme from the plan at a meeting last week.

The motion will be discussed at a council meeting on October 17.