AN ENGINEERING company fears it may be forced to scrap its expansion plans unless a controversial housing development gets the go-ahead.

Allerton Engineering, in Northallerton, hopes to sell its headquarters to housebuilder Persimmon Homes.

Bosses say the deal will help fund a new £3m headquarters elsewhere in the town - a move that could boost the workforce by 50 per cent.

But residents who live in nearby Bridge Terrace are opposed to the plan and have already campaigned successfully to have the project rejected by councillors.

They said the development would lead to the loss of their 100-year-old gardens, which they rent from Allerton Engineering, parking spaces and amenities.

Persimmon Homes has submitted an ammended scheme for more than 60 houses on the site and Allerton says if it fails again it may be forced to put expansion plans on hold.

Lawrence Ellis, Allerton Engineering chairman, said: "We must move to more appropriate and up-to-date premises to fulfil our potential, and we need the scheme for our existing site to be supported to give us the funds to do so.

"The Romanby Road site is cramped and inefficient with little scope for further expansion. Our highly-supportive employees deserve better facilities and, if we relocate, we are committed to increasing our workforce by 50 per cent within three years.

"We now stand at the threshold of further success which can happen only if we obtain approval for this planning scheme."

Allerton has already ear-marked purpose-designed premises on the Darlington Road Industrial Estate.

Resident Marilyn Tyreman said: "A new community will be created at the expense of an existing one."

But Maurice Cann, head of development control at Hambleton District Council, said: "The plans, which haven't been formally submitted yet, include car parking spaces for all the Bridge Terrace residents and a communal open space and play area for all residents."

The application is expected to be considered by the planning committee next month.