Meath county manager yesterday confirmed he was seeking a judicial review of a Bord Pleanála decision to grant planning permission for 400 homes in Navan.
It includes a requirement for 20 per cent of the units to be made available for social and affordable housing.
In October 2004, the council refused to grant permission to Taggart Homes Ireland Ltd for 425 residential units at Johnstown, Navan. The council said the development would be premature "to the upgrade of sewerage facilities in the area".
However, this was appealed by the company to An Bord Pleanála, and last May the board granted permission subject to conditions.
The permission is for 361 terraced, semi-detached and detached houses, and 64 one- and two-bedroom apartments on the 30-acre site to the southeast of Navan town centre.
If the council receives 20 per cent of the homes it is estimated they will be worth €8 million to €10 million.
Yesterday the councillors were told by Tom Dowling, the county manager, that "it has since come to light that the board did not include a condition requiring compliance with Part V of the Local Government Planning and Development Act 2000.
"The effect of this omission is that the council will not be able to enforce Part V which allows us to obtain up to 20 per cent of the houses to be provided in the development or alternatively land or a financial contribution.
"This is a matter of serious concern to the council as it is clear in law that An Bord Pleanála are required to comply with all relevant legislation in arriving at their decisions."
Mr Dowling said the council asked for an explanation from the board and while there were negotiations "I have now decided to seek a judicial review of the decision on the basis that the order, due to an administrative error, did not comply with the requirements of Section 96 (2) of the 2000 Development Act".
He said An Bord Pleanála had indicated it would not oppose such an application and would consent to its decision being quashed and remitted back to it for the purpose of attaching an appropriate condition.
He said the council's legal advisers have been instructed "to proceed immediately with the process, and in particular to make every effort to ensure that the matter comes before the courts as quickly as possible".