Gafoor Poultry Products Ltd were given permission in mid-August for extension to the side and rear of their building in Fletcher Road.
But Preston Trampower were given permission in 2016 for a test tram line and station on the same plot of land- and say this extension is a "deliberate attempt" to block their lines and force them to reconsider where the depot is built.
They have also hit out at Preston Council's decision to allow a planning officer to pass the controversial extension plans, rather than put it to debate before the planning committee.
Lincoln Shields, director of Preston Trampower, said: "It looked as though it was a deliberate attempt to block the tracks and the depot.
"We wrote and objected as did many people. Our planning agent queried why the extension was being dealt with under delegated powers, and was told it was a minor application.
"That is odd to us, because we have made a supplementary application to alter certain conditions when building the depot, and that is considered to be a major application."
Preston Trampower were given unanimous approval by Preston Council to build the test tram line on land to the north side of the site occupied by the Gafoor Chicken factory, which would see a stretch of the former Longridge to Preston railway line reinstated in Deepdale.
Under the approved proposals, the tram operation will not be open to paying customers, but will be used for training purposes, as a demonstrator for other local authorities, and to raise public awareness of trams as a sustainable mode of transport.
>>>Read about how Preston Council passed the tram plans here
Mr Shields said bosses at Gafoor agreed for use of part of their land for these purposes "years ago".
He added: "If the extension is built we will have to use an alternative route for the tramway or an alternative route for the depot. But we're waiting for a planning decision on our pre-conditions first.
"We have until the middle of December to make a meaningful start on the project, to put a spade in the ground."
He added: "The local community really want this to happen. The public are mad for it and the city should be aspiring to have this. It will ease the traffic problem and we can deliver it for free, because we have private funding.
"But people don't believe it's possible."
More than 1,300 people signed a petition in objection to Gafoor's extension plans, and written representations against it were also received from residents and councillors.
Preston City Council said the number of objections does not have any bearing on whether an application is dealt with by committee or under delegated powers by officers and that because the proposed extension was less than 2,000sqm, if could be dealt with by a planning officer.
>>>Read how residents reacted to the council planning decision here
They also said that granting permission for one use of the land did not stop permission being granted for another.
A Preston Council spokesman said: “The application site occupies land that is allocated for employment use on the Policies Map of the Preston Local Plan. The land is not allocated for use as a transport route for trams or any other form of transport.
“The grant of planning permission for a specific use on land does not alone preclude the grant of a subsequent planning permission for an entirely different use on the same land.
"This may be precluded if the proposed development was contrary to the development plan, but in this case of this land neither the tram line nor the extension to an existing were considered contrary to the development plan.”
Gafoor declined to comment.