A bid to protect an area of open ground in north Oxford from development by turning it into a Town Green could be decided by the House of Lords.
City councillors had been poised to approve plans by Oxford Citizens' Housing Association for 47 affordable homes on part of the Trap Grounds site.
But a planning inspector's ruling, that the city council owned land near Port Meadow should be registered as a Town Green, or common, put the scheme on hold.
The matter was then referred to the High Court and a ruling is expected by January 22.
Council leaders agreed they would take the case to the House of Lords if the High Court judge did not find in the council's favour.
They agreed to earmark £53,000 from reserves for legal costs, if they needed to take the case to the Lords.
But they also said that they would try to find a compromise solution in the meantime.
The move came after Trap Grounds campaigner Dr Peggy Heeks, of Bainton Road, urged councillors not to continue with legal action.
She said: "There have been informal signs that each side might accept a compromise.
"I ask the council to build on these and convene a meeting, with an independent chairmanm to explore the possibility of a peaceful solution. The cost would be negligible, the political value inconsiderable."
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