The outline planning application would, if successful, see land developed to the east of the factory at Spout House Lane, Hove Edge, Brighouse.

The proposals have caused controversy, with Hipperholme and Lightcliffe Environmental Group vowing to fight development.

And, in a separate twist, an outline application has also been submitted to build dozens of homes nearby on the site of Danehurst Garage, St Giles Road, Lightcliffe.

The Crosslee site is allocated for employment land and the company has said disposing of it for housing would release more money at a difficult economic time.

The plans would help to maintain its position as a major employer. Crosslee employs 420 and at seasonal peaks temporary staff push that figure beyond 500.

A report from planners to the planning committee said the proposal would be acceptable, subject to conditions. It said the retention of employment at Crosslee outweighed reasons for not allowing the development.

An application from Tuck Royd Quarry, Halifax Road, Brighouse, could also see more than 60 homes built on the Denehurst Garage site which is bordered by Spout House Lane and Green Lane.

The land is currently used for stone storage, sorting and cutting and also for the repair and storage of coaches.

A decision on that application is expected in June.

Hipperholme and Lightcliffe Environmental Group has been campaigning to keep employment land protected from housing.

Chris O'Connor, chairman, said he feared a rush of applications ahead of new planning guidelines to replace the current unitary development plan. It is likely to be 2012 before the Local Development Framework is in place.

He said if the Crosslee application was successful it would set a precedent, adding: "It has always been my fear that once one application was in. everybody would jump on the bandwagon.

"It could open the floodgates and we could lose all the employment land we have and we will continue to battle against that."