In February, a German-Irish couple's planning application to build two houses near Mountshannon in east Clare was unexpectedly held up when the county council requested information on who the occupants of the proposed dwellings would be.

The site is near Lough Derg and the couple had fallen foul of the 1999 County Development Plan which seeks to restrict developments outside existing settlements or in areas designated "visually vulnerable".

Their plight made headlines after it became a test case for the implementation of the council's settlement location policy, which raises the issue of favouring locals over non-locals in areas of high development pressure or in vulnerable landscapes and scenic areas.

Because Ms Marion Schulz is a foreigner the words "apartheid", "racist" and "purge" popped up in media reports and comparisons were made with the Austrian anti-immigration Freedom Party.

The council, put on the defensive immediately, emerged bruised from upholding its philosophy that "every person will have an opportunity to reside within the area in which they have been born and raised".

Its planning administrative officer, Mr Myles Carey, said there were "Ryans and Kennedys and McNamaras being asked for that information" and, equally, being refused planning permission.

"Our experience here is that you will immediately define the person who is non-local, who has no association with the place at all," he said.

He said many people who had moved to Ennis to work had been refused permission to build houses outside the town because it is an area of high development pressure and they cannot show they have established links there.

The same holds for coastal areas, the Burren and the Lough Derg region, where some people want holiday homes.

Mr Carey likened the problem to cracking a glass. Just as the crack becomes the dominant feature, so too does the dwelling in a rural area. "One of the objectives of all development plans in the whole country is to preserve the visual quality of those lands," he said.

Equally, the council is trying to preserve the population's rural fabric by favouring land.

"The population in the countryside must be renewed or recharged. They constitute activities in those areas," Mr Carey added.

Ms Schulz, who, with her Kerry-born partner, Mr Michael Guiheen, and two children, have been living in rented accommodation in Co Clare since 1993, said she replied to the questions on their connection with the area.

They are still awaiting planning permission after further information was sought on the drainage of the 2 1/2-acre site which was bought with a credit union loan. She resented the personal nature of some of the questions. Like many people in the area, which has undergone a property boom, she and her partner have been priced out of the market. Their only recourse is to continue renting or to build - if they are allowed.

Meanwhile, a physically disabled Dutch national, Mr Cornelis Alberts, who has lived in nearby Killaloe since 1992, has appealed a planning refusal to build a bungalow adjacent to his existing home.

The council stated that no local housing need existed in his case as it had already been catered for.

Mr Alberts said he needed a bungalow with doorways wide enough for a wheelchair because arthritis had set in after he lost his leg in a car accident and his mobility was increasingly impaired.

Mr Alberts said he would not be able to adapt his current dwelling. "If I am refused because I was not born here, I feel that is unfair," he said. The council has affirmed its decision in a submission to An Bord Pleanala, saying Mr Alberts's reasons are not considered material to building a new home. It said that living in "fully serviced settlements has sound sustainability benefits for people with special needs". Mr Alberts claimed such views interfered with his right to choose where to live.

The other side of the lake is in Tipperary North Riding, which has similar policies to control development in a "high amenity area".

The county engineer, Mr John Gaffney, said the conflict between conserving the countryside and allowing development had been "a real problem".

"We have a discrimination in effect built into the county development plan which would favour the families of the indigenous community in the area," he admitted.