A major stumbling block in the way of a massive housing scheme on the edge of York appears to have disintegrated.

Work looks set to begin again on a "master plan" for a so-called model village at Osbaldwick after the city council won Government support for its conviction that the council can determine the site's future.

Coun Dave Merrett revealed that Government Housing and Planning Minister Nick Raynsford now believed that the city council was entitled to decide on any application put forward for the development of the site.

Work on the plan for 500 new homes on the land was halted in the summer after Mr Raynsford wrote to Ryedale MP John Greenway appearing to support protesters' claims that any council decision on the land would wrongly pre-empt the outcome of the local plan inquiry regarding green belt land.

Mr Raynsford had said the site at Metcalfe Lane was green belt land and potential developers the Joseph Rowntree Foundation ceased work until the council had established the land's status as part of the inquiry.

But Coun Merrett, the council's executive member for planning, transport and the environment, revealed he had written to Mr Raynsford challenging the Minister's interpretation of the situation. He said: "In response to my letter, the Minister for Housing and Planning has now agreed that the position is less clear than he had originally set out.

"The Minister has taken further advice following the legal evidence the council sent him and has now agreed that the status of the site will not be confirmed until the local plan is adopted.

"However, he has also agreed that until that time, it will be for City of York Council to come to a view on that status and also to determine any planning application for the site."

Mr Greenway, whose constituency includes the site at Osbaldwick, vowed to battle on against the plan.

In a letter to Osbaldwick parish councillor Malcolm Kettlestring, Mr Greenway said he was disappointed by Mr Raynsford's point of view.

But he said that the minister had also confirmed that new planning guidance required local authorities to give priority to previously-developed land and existing empty properties before developing green field sites.

He added that this suggested "there may well now be other considerations which limit or indeed prohibit the planned development at Metcalfe Lane, at least on the scale envisaged in the Joseph Rowntree scheme."

Nobody was available to comment today at the Joseph Rowntree Foundation.