Housebuilding in parts of Hampshire has been placed on hold because of warnings over nitrate pollution in the Solent.
Five councils have accepted advice from Natural England that "planning permission should not be granted" unless developments were "nitrate neutral".
The government body said its advice followed recent European Court rulings.
Portsmouth, Fareham, Gosport, Havant and East Hampshire councils have said some developments are on hold.
The Partnership for South Hampshire (Push) - which supports economic growth in the region - said thousands of new homes were in limbo.
"Effectively across south Hampshire we cannot at the moment determine planning applications for new homes," Push chairman and Fareham Borough Council leader Sean Woodward said.
Portsmouth City Council said it had taken legal advice that confirmed the effect of two European Court rulings in 2018.
"The city council has temporarily ceased granting planning consent for additional dwellings... and tourism-related development," it said.
Three councils - Isle of Wight, New Forest and Southampton - said their planning consents were unaffected.
Isle of Wight Council said it was still granting permission although it had not directly taken legal advice.
Mr Woodward said he would ask the government to suspend housebuilding targets while councils worked to find a solution.
He said he hoped mitigation schemes could unlock development, including work with arable farms, the source of "most of the nitrates".
Hampshire architectural technician Ian Knight said developers' jobs were at risk after the granting of planning consent started to slow down in April.
"We've got a number of our clients for whom the future is looking very dodgy," he said.
Natural England said its advice was not binding and councils could depart from it if they had good reason.
It said: "High levels of nitrogen pollution are already impacting protected sites in the Solent area and new housing contributes additional nitrogen."