Councillors have endorsed plans for up to 4,000 homes in Rackheath - despite developers offering just 10pc affordable housing.
The Rackheath North Masterplan could see up to three new schools and a memorial park built on a 293 hectare site in the north of the village.
Its development is being co-ordinated by Broadland District Council, Barratt Homes Eastern Counties and Manor Farm.
A report which went before Broadland's cabinet on Tuesday said if members endorsed the masterplan, an application could be submitted this year.
However, it said the plan was only able to progress as a 'viable proposition' if it delivered 10pc affordable housing.
In large developments, Broadland's housing policy expects a third of homes to be affordable (33pc).
Should the scheme go ahead with just 10pc, it will result in a loss of 920 affordable homes.
Roger Foulger, Broadland's cabinet member for communities and housing, said he did flag up the issue to members.
But he said the scheme still has to go before the local authority's planning committee.
'At that time, the element of affordable housing will be a major consideration [to the committee],' he said.
'And it will be up to the planning committee to accept that or not.'
An officer's report stated that the figure had been the subject of 'lengthy discussions and negotiations'.
But it said the viability and funding shortfall had not been overcome. 'The shorfall means that Barratt/David Wilson Homes is unable to commit to progressing the masterplan if the affordable housing is higher than 10 percent,' the report said.
A spokesperson for Barratt Homes Eastern Counties said: 'When developing the masterplan Broadland District Council appointed consultants to carry out an independent viability of the masterplan, which supported a 10pc affordable homes provision, however we will continue to work with all parties to review this as the planning process progresses.
'Following the approval of the masterplan we are looking to submit an outline planning application for the entire site.'
The overall site spreads from Wroxham Road in the west to Salhouse in the east.
A spokesperson for Broadland District Council said: 'North Rackheath is one of the largest allocations for development in our current local plan and it has been stalled for around 10 years as it hasn't been financially viable for the developers to commit to developing the site.
'Our policy includes a target for 33pc affordable housing but also states that the proportion of affordable housing sought may be reduced where it is shown through a viability study that this target cannot be met.'
They said the masterplan would not result in a loss of affordable homes, and 'would actually create 10pc of affordable housing which would otherwise not be developed'.
'As the plan goes forward through the planning process, we will be looking at ways to increase the amount of affordable housing by accessing other sources of funding designed to kick-start major housing development,' they said.
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