Derbyshire Dales District Council is to advise the Planning Inspectorate of its intention to withdraw its pre-submission Local Plan from a current public examination.
The decision by a special full meeting of the District Council on Thursday (2 October) follows a Government Planning Inspector's declaration that the number of new homes envisaged in the Dales Plan is too low.
At the end of July, Government Inspector Keith Holland, presiding over a two-day examination of a pre-submission draft of the Plan, decided the 4,400 dwellings the council estimated should be built locally in the period 2006-2028 was more than 2,000 homes short of what was needed.
Now the District Council is to look again at the Plan and invite local people to submit suggestions of potential housing sites that have so far not been investigated.
In a report to Thursday's meeting, Corporate Director Paul Wilson warned that the District Council had a stark choice to make.
"It can either take control of the initiative now and deal with these difficult issues as swiftly as possible, thereby minimising the risk of planning by appeal across the whole of the plan area and the associated costs that that would entail," wrote Mr Wilson, "or it can take a longer period of time to consider the issues raised by the inspector through a process of positive engagement with the public, thereby affording an opportunity to fully explain the difficulty of the situation."
Mr Wilson conceded that due to the procedural requirements involved in the withdrawal of a Local Plan, the District Council would have to take "a few steps back" in the process, meaning adoption of a Local Plan for the Derbyshire Dales was probably 18 months away.
He added: "The council will be unable to resist applications for housing development in the interim unless any adverse impacts of doing so would significantly and demonstrably outweigh the benefits of providing land for housing."
Put together by the District Council following an exhaustive consultation programme involving local residents and groups - the draft Plan sought to address local needs, especially for housing and economic development. It also protected the very special qualities of the district's environment – both natural and built.
Submitted to the Secretary of State in May for independent examination, it had been hoped that the Plan would be approved by the end of this year, setting the policies for key development sites.
District Council Leader Councillor Lewis Rose OBE, who chaired a series of Local Plan meetings, said:
"We've been preparing this Plan for several years and from the start we have listened carefully to the views of local people. I want to personally thank everyone who has contributed across our communities and appeal now for their help in identifying previously unexplored potential development sites for consideration and further public consultation.
""National policy is demanding a radical solution to meeting the housing needs of the country with the target nationally to more than double the current rate of house building.
"While we totally understand our residents' desire to protect, as far as possible, greenfield sites from development, we now have no choice but to re-submit a plan that satisfies Government policy and meets its perception of the future housing needs of the Derbyshire Dales.
"We are not alone in having to face up to this predicament and we are under no illusions that the outcome will undoubtedly displease some of our residents, but we are in the unenviable position of trying to reconcile the strongly held views of local people with a pro-growth national planning policy framework.
"I can assure the communities of the Derbyshire Dales however that any decisions to allocate further land for development will only be taken following full public consultation."
Local people will soon be invited to submit new potential site ideas in an online survey.