The A120 corridor in north Essex is the latest area to come under threat from "eco town" development, DCLG has announced, despite district council opposition.
Housing minister John Healey said a partnership of local authorities in the corridor had agreed to develop proposals for an 8,000 home new settlement.
No location for the sprawl has yet been agreed, but DCLG has found £200,000 to support work on location and development.
But while the plan is also supported by Essex County Council, Tendring District Council said it would spell disaster for other local towns.
It said there is no site in Tendring allocated for 8,000 homes and the priority ought to be coastal towns in need of regeneration.
"There is absolutely no need whatsoever for a new eco town in our district and we have the evidence to back that up," said Cabinet member for planning Sarah Candy.
"All our energies, effort and focus for development are being concentrated on our priority areas for regeneration which are the coastal towns of Clacton, Walton and Harwich - and to take our focus off that could spell disaster for them."
She said there is concern about the way the announcement had come about. There is a possibility of expanding Harwich, at the end of the A120 corridor, although flood issues would need overcoming.
But Mr Healey claimed Britain is leading the world with its eco town standards.
"Today I have pledged funding to back the Haven Gateway Partnership's proposals, so they can strengthen Britain's green revolution and demonstrate the eco-town potential for mainstream developments," he said.
Standards set out for "eco towns" include requirements they should have open space and public transport and that homes should meet Code for Sustainable Homes Level 4, well below the Government's own 2016 target.
