Traders in Didcot fear businesses could suffer following recommendations to ban traffic from part of the town centre.
Chris Notman, president of the Chamber of Commerce, said the effect on shops in the town centre would be catastrophic.
Recommendations to close Broadway were published in a transport document which accompanied plans to build 3,200 homes on the western edge of the town.
Consultants WS Atkins say that pedestrianising part of Broadway would reduce traffic in Wantage Road, west of the town, and when combined with proposed traffic calming in Harwell, would help prevent an increase in traffic through the village as a result of the new housing.
But the plans have been criticised by traders. Mr Notman said: "We have already experienced a devastating loss of trade caused by temporary traffic signals and roadworks in lower Broadway while the extension of the Didcot-Milton heights link road was being built."
He said any permanent closure of Broadway would force many businesses to close. He added: "It seems completely out of balance that a proposal as drastic as closing Broadway could be made simply to act as a traffic reducing method for Wantage Road."
The chamber of commerce will voice its concerns when the outline proposals go before a special meeting of the town council's planning committee at the Civic Hall on Monday (November 25) at 7.30pm.
The planning applications will be determined by South Oxfordshire District Council and the Vale of White Horse District Council.
However, county and Didcot town councillor Terry Joslin dismissed the closure of Broadway as "a red herring" by developers.
He said it was considered in 1998 "merely as a desktop study" and not accepted by the county council as transport policy.
He said the idea had never gone out for public consultation.
Members of the public wishing to speak on the proposals must contact the One Stop Shop at the Civic Hall in writing by noon tomorrow (November 22).
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules hereComments are closed on this article