Plans to build 12 homes on the land off Preston Road in Grimsargh were thrown out last year over fears of a lack of affordable housing on the development.
But the plans by United Utilities were brought back to Preston Council’s planning committee where they were given the green light, as long as a section 106 agreement can be drawn up.
Chairman of Grimsargh Parish Council, Lindsay Philipson, told the meeting the site of the former reservoirs had been neglected, and was maintained by a small group of volunteers.
She said the site was home to wildlife, and said there was a “huge amount of untapped potential” and ideas to develop the site for the public to enjoy.
Bosses behind the application proposed to give contributions towards off-site affordable housing, and Coun Neil Cartwright, addressing the committee, described the development as “win win”.
He said: “The long-term future is secured for the benefit of Grimsargh residents and wider residents, and the city council would receive a significant sum of money to use where it’s really needed.”
But Coun Peter Moss said: “Those kids growing up in Grimsargh won’t be able to afford to live in the village because we are building four, five and six-bedroom houses which they wouldn’t be able to afford, and therefore they would have to move away.”
Chairman Coun Brian Rollo said it was “outrageous” that locals had said they didn’t want affordable housing on the site, but said: “On balance, reluctantly, despite that outrageous comment, I think I’ll support this as a one-off.”