The two bodies responsible for the Brecon Beacons National Park are at loggerheads over plans for 200 homes on an old army camp.
Powys Council has indicated it may seek legal advice on a possible challenge if National Park Authority members approve the £50m scheme near Crickhowell.
The proposals have led to a rift between the two organisations, following a string of controversial planning cases involving the park authority.
Land owners Crickhowell Estates are seeking planning permission for 200 homes on the former Ministry of Defence land at Cwrt-y-Gollen.
The development, close to the A40, would also include a nursing home for the elderly, pre-school childcare facility and industrial units.
The MoD retains part of the land adjoining the development for a firing range and other facilities.
Despite strong opposition, the park authority is recommending its members give the development the green light on Tuesday.
Concerns have been expressed about the size and scale, its location by a busy road and partially on a flood plain.
Opponents say local services would struggle to cope with such a large influx of residents and that this could threaten existing communities.
A local housing market assessment recently concluded that just 129 new homes were needed in the Crickhowell and surrounding area up to 2014.
The Campaign for National Parks is also opposed to Cwrt-y-Gollen, saying its scale is "unprecedented".
Sue Shaw, chair of Glangrwyney Community Council, says she fears the development would dwarf the village.
"If we've only got 80 or 90 houses within the village - and it's a scattered village, it doesn't have a heart or a centre - then 200 extra houses would just swamp us."
Powys Council had requested £2m from developers to offset the anticipated future costs of the scheme, in particular the increased number of pupils needing places at Crickhowell High School.
But in their report to members, park planning chiefs say that only £280,000 is on offer from the developers, whose own independent assessment of future education needs "differs significantly" from the council's.
Powys Council board decided to formally object to the development at a meeting on Friday.
Councillor Wynne Jones, chair of development and regeneration for Powys, said, "The county council made a case for the allocation of a sum of money, just under £2m for planning obligations, to mitigate the effects of this large development and the impact it will have on some of the council's vital services.
"The developers were proposing something like £280,000.
"This is an unusual situation and it does cause me some concern because we normally have quite a close working relationship with the Brecon Beacons National Park.
"I'm hoping we're not going to fall out over this but there is potential, obviously, for some damage to relationships."
The case comes against a backdrop of concern about planning decisions taken by the National Park Authority over recent years.
In January, a High Court judge quashed planning permission for a caravan site at Gilestone, Talybont-on-Usk, granted in 2005, ruling that it was unlawful.
A spokesman for the Brecon Beacons National Park Authority said: "Feelings run understandably high over large-scale developments but we, like all local authorities, are accountable for our statutory responsibilities.
"We have found that affordable housing is an emotive subject for residents in the park. The scheme is in three phases and it is envisaged that there will be 20 affordable houses per phase so the provision is spread across the seven to ten-year development period."
Crickhowell Estates said it has consulted widely on the proposals, which it believes would bring a number of benefits to the local community of Glangrwyney.
Highway improvements on the A40 trunk road, funded by them, would address traffic safety fears.
Eye on Wales is broadcast at 1630 BST on Sunday on BBC Radio Wales.