Amazed councillors have discovered a hi-tech motorcar racing research plant - in a York barn.

Prototype saloon cars driven by the Honda racing team are designed and assembled at the former pig farm at Earswick.

But the secretive business, employing 22 people, does not have official permission to be there, according to City of York Council's planning department.

For months curious neighbours of Fosslands Farm, on Strensall Road, have wondered what went on behind the closed doors of Foss-Tech Ltd.

Now City of York councillors have gained access to the "highly secretive" operation - and found the old pig farm brimming with state-of-the-art equipment.

The company designs and makes specialist Honda Accord racing saloon cars, which are driven by James Thompson, an accomplished international saloon car racer who competed in this year's British Touring Car championship.

But the business has been slammed by York planning chiefs, who were aghast to find it operating without planning permission. Foss-Tech Ltd have told them that the business grew out of James Thompson's hobby, with his father David Thompson, who owned the farm, letting him use the redundant farm buildings to keep cars in.

The business was now just a "typical cottage industry" it said.

But when councillors went along to view it, they were astonished.

Planning chairman, Coun Dave Merrett, said: "We were frankly gobsmacked. This is not a small hobby, it is clearly a substantial operation employing 22 people, with absolutely no planning permission. What possible reason can there be for this gross abuse? Our feelings are very strong and the company's approach has been reprehensible." Coun June Vaughan added: "It is a highly secretive operation and it is quite unacceptable that this has gone on without permission."

She said: "We had no idea what went on in there but local people were getting curious. It was obvious they were not just keeping old tractors in that barn because security is pretty tight. When we saw inside we couldn't believe it. It was so hi-tech. It is just an ordinary barn from the outside. There are computer design systems and precision engineering equipment, and a car showroom with a prototype Honda Accord on display. There is clearly a huge amount of investment in there. It was a bizarre justification to call it a cottage industry."

Foss-Tech Ltd has applied for planning permission to use the former farm buildings as workshops, but planning bosses at the council have recommended it be refused. They say 125 homes are scheduled to be constructed next to the site next year, after Mr Thompson sold part of his land to Bryant Homes, and residents could be disrupted.

Janet O'Neill, a planning consultant acting for Mr Thompson, said she was aware the site was going to be surrounded by housing, but considered it to be "compatible" with its new neighbours.

She said Foss-Tech had a sister company, Advanced Automotive Design, in Peterborough and Mr Thompson hopes to relocate it to York, bringing new jobs with it.

She said the company would be happy to accept a temporary planning consent of five years if the council had any doubts.

The matter will be considered by the council in the new year after an independent assessment of noise levels have been carried out.

Colin Essex, who works at Foss-Tech Ltd, confirmed that planning permission had now been applied for, but declined to speak further about it.

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