Objectors to a proposed Sikh temple in Banbury said Cherwell District Council would contravene Government guidelines on open space if it granted planning permission.
They said the council would also contradict its own stated policy on the sale of land if it offered the proposed site in Ruscote Estate to the Sikh community.
Local Sikhs want to build a temple and community centre next to the Musketeer pub.
The land is used as a recreation area by residents, while the council holds sports meetings there.
The council has admitted the proposed site had been valued and would be made available to the Sikhs if planning permission was granted.
Government guidance states that local authorities should provide the strongest protection for open space that is, or has potential to be, of value to the community, and should resist development pressures that would reduce recreational provision.
The council's chief executive Grahame Handley said: "It is only guidance from the Government, not mandatory policy. It is true that providing a facility for one community might take away an amenity of another."
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