Developer Crest Nicholson has announced it intends to take possession of Harrogate Rugby Club's current home at Claro Road, and build housing on the site.

The decision follows months of negotiations between the developer and the rugby club, after the 10-year lease on the land, which Crest Nicholson bought in December 1999, expired.

But Coun Don Mackenzie, Cabinet member for planning at Harrogate Borough Council, told the developer to get off the site.

He said: "We don't want to have housing on that site and plan to use it for a sports regeneration area – we are trying to block this from happening.

"I would urge them to continue with negotiations to allow the rugby club to purchase the land back.

"Harrogate Borough Council does encourage the building of affordable housing but only in places that we suggest – and Claro Road is not one of them."

While Crest Nicholson has said it will take possession of the site, it will allow the rugby club to continue to play under licence there for the time being but give no assurances as to how long that will be.

An application by Crest Nicholson to overturn the council's designation of Claro Road for recreational use was rejected by a planning inspector on January 27.

Stephen Stone, chief executive of Crest Nicholson, said: "Since agreeing to purchase the land we acted in good faith and have always honoured our obligations to the club and, since it became obvious that their original aspirations were unachievable, we have done our best to find an alternative.

"It is extremely regrettable that both parties have now been forced into the current situation.

"All we are doing at the present time is taking possession of the site which was agreed many years ago.

"The site's future use has not yet been decided and we remain receptive to any proposals which local people or the local council may wish to make, although we believe that any such discussions are best conducted in private and not through the Press."

Harrogate Rugby Club did not wish to comment.