A main rail line smashed by storms last year will be threatened by planned cliff-top homes, Network Rail has said.
Developer Pegasus Life wants to build new homes on the cliff top at Dawlish in Devon where the rail line was closed for more than two months last winter.
Storms left the line, which connects Cornwall and much of Devon with the rest of the UK, dangling in mid air.
Pegasus called it an "excellent and appropriate concept for this wonderful location".
Network Rail has threatened legal action if the scheme goes ahead and results in damage to the line.
Teignbridge Council officers are recommending approval for the plans, subject to Network Rail lifting its objections to the 31 retirement homes at Old Teignmouth Road.
Network Rail told the authority: "We have serious concerns that the proposal if permitted could destabilise the cliff. The area concerned has a high profile of cliff failures and associated rock stabilisation works having to be carried out.
"You should recall we recently had to shut the main line railway as a result of damage to the sea wall caused by storms.
"Before we were able to reopen the railway we also had carefully controlled sea cliff collapses and therefore we know there are potential issues in this locality."
And it warns: "Network Rail will consider any such failure and damage [to the railway line] as an act of nuisance and shall take all necessary action to seek redress for the damage caused and any financial penalties for closure of the railway through the courts."
Howard Phillips, chief executive of Pegasus Life said: "We are committed to creating stunning homes that sit in harmony with their surroundings.
"Prior to our application, there was extensive consultation with the local community, and a high level of support was received.
"We will build the new homes in sensitive appreciation of the special landscape, including ensuring there is a 10m (33ft) exclusion zone from development by the cliffs and would only proceed when Network Rail have the assurances they need."
The council's planning committee is due to consider the application on 13 January.