Another 1,500 new homes could be built in Didcot on top of more than 7,000 already planned or proposed.
In return, the town could expect millions of pounds from the Government for infrastructure improvements, including roads and sports facilities.
A submission has been made to the Government to include the town in the first round of designations of 'New Growth Points'.
But the bid, made by officers at South Oxfordshire District Council, has angered opposition councillors in Didcot and even the ruling Conservatives are sceptical about the scheme.
If approved, it would take the proposed number of new homes in Didcot to 8,640 by 2026 doubling the town's existing population of 22,000 people.
Senior officers lodged the application after a secret briefing for council cabinet membersneed to confirm this with chris, just said Cabinet briefing initially.
But the council has put a high price on the extra homes.
Its submission includes a £160m shopping list for infrastructure: £27m for recreational facilities, such as community centres, sports pitches and play areas £35m for the town centre redevelopment, including a city garden and cycle ways £23m for road improvements £13m for a Harwell bypass £20m for a new two-way Cow Lane underpass £7m for a country park.
Further proposals include a £16m healthy living centre, a youth centre and better transport, health and education services.
District council chief executive David Buckle told the Government the council had not formally agreed to seek growth point status and any decision on extra housing in Didcot would have to be made through the normal planning process, with public consultation.
He added that the level of investment would have to address current infrastructure problems, not just meet the needs of any extra homes.
He said that if these conditions were not met, the council would withdraw its interest.
The council's cabinet member for planning, John Cotton, said that the decision to apply had been made by Mr Buckle under delegated powers.
He said he was highly sceptical of the growth point scheme but added: "Officers have convinced me, just enough, that on balance we're probably better to be on board at this point than not on board."
He said: "We're saying 'yes, if there's money we would be interested, but you have to have enough of it'."
"The Government doesn't say how much money is available. Once we get some information, a report will come to cabinet for us to make a policy decision."
Didcot Labour councillor Margaret Davies called the bid reckless. She added: "With a flick of the pen they have added a further 1,500 houses to the 3,000 threatened by Oxfordshire County Council. They're encouraging a sprawl that would eat up villages and damage Didcot's community."
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