A new planning blueprint setting out where thousands of new homes will be built in a district over the next 15 years could be torn up.
North West Leicestershire District Council has spent the last five years formulating and consulting on a "core strategy" to replace its local plan.
It spells out where up to 10,000 homes will be built over the next 15 years to satisfy a shortfall in housing and meet Government building targets.
However, the whole plan is now in jeopardy after a planning inspector suggested the council scrap the document and go back to the drawing board.
Inspector Michael Hetherington, in a letter to the council, warned that the core strategy takes no action to address the district's "serious and urgent" housing shortfall.
"The absence of provision for an adequate future supply of housing represents a major flaw in the plan," he said.
"It is difficult to see how this could be remedied in the context of the present examination."
Mr Hetherington also said the council's approach " may amount to a failure to satisfy the duty to cooperate" with the process.
The inspector said an "exploratory meeting" to discuss the issues raises was vital.
The district council's opposition Labour group has demanded an emergency meeting and criticised the ruling Conservative administration's handling of the whole affair.
Councillor Tom Neilson said: "They need to explain themselves for what appears to be basic incompetence from their leadership. The residents deserve answers.
"Communities are already suffering from the current free-for-all in planning applications."
Chris Tandy, vice-chairman of Ashby civic society, which is fighting unwanted development proposals in the town, said: "The district council has consistently failed to listen and act on criticism of their strategy by residents or councillors."
But deputy council leader, Councillor Alison Smith, said: "We believe our calculations are robust, appropriate and sustainable.
"We have a responsibility to develop the district sensibly and carefully. If we are forced to withdraw our plan, it could take another two years to develop a new one."