More than 200 homes can now be built as part of the first phase of the biggest housing development planned in Mid Suffolk.

Plans for a school and an employment site as part of the Chilton Leys estate, in Stowmarket, have also received outline planning permission.

The vote to accept the plans as the first phase of a larger 800-home scheme was unanimously backed at Mid Suffolk District Council yesterday – barring one abstention.

In January councillors concerned by the amount construction firm Taylor Wimpey had put forward in a Section 106 agreement – developer cash for infrastructure – for affordable homes, health facilities, transport links and sustainability, decided to allow more time for the plans to be developed. Some £4million would be needed to meet all Section 106 “obligations” but only £1.9m was made available in January.

The phase one part of Chilton Leys was said to be “not viable at all” with “considerable time and costs” for Taylor Wimpey because of a decision to save the council-owned recreation area, Chilton Fields, from development. The phase had to be redesigned – including adding the school – which created the extra costs, said council officer Chris Edwards.

Since January Mid Suffolk planners have worked with Taylor Wimpey to revise how much money is available in the agreement. But again the £1.9m was offered in the meeting yesterday, which concerned several councillors.

John Matthissen, councillor for Onehouse, where a large proportion of the overall site would be, said he could not support the proposals which would create a “substandard” development. He said: “It is certainly not sustainable and it fails to deliver the relevant strategic priorities of the district council.”

James Bailey, agent for the developer, said: “Detailed discussion has resulted in careful consideration of the rural setting and the rural edge of the site. Detailed viability work has been undertaken by independent experts in the field. It must be remembered that it’s the first phase of a larger site.”

Rachel Eburne, councillor for the Haughley and Wetherden ward, where another part of the development is to be built, said it was “difficult to address all the issues” but had concerns over the environmental standards the homes would reach.

The revised Section 106 agreement states that £60,000 will be for health facilities and £235,000 for affordable homes but the council heard how this was likely to be used with other funds at a later development phase.

No money has been put towards ensuring the homes would reach a “code three” Government environmental standard, to renewable forms of energy or to public rights of way. Extra funding for Stowmarket’s library and new cycle ways will also not be available.