A proposal to allow housing close to one of Bromyard's key industrial areas may see hundreds of jobs leave the town, firms have warned.

This follows the publication of a report by a Government inspector into Herefordshire Council's Unitary Development Plan, following a public inquiry last year.

The report backs proposals for housing on land at Porthouse Farm, previously reserved for industrial and commercial use.

Polytec Holden managing director Geoff McGladdery, said: "Our previous experience of houses being built close to our existing facilities has been very negative."

Polytec Holden has operated in Bromyard for more than 35 years and employs 265 people. The company also buys many goods and services in and around Bromyard.

A total of 55 per cent of its sales are exported and the company counts Volvo, Saab, Mercedes, Honda, Ford, Jaguar, Land Rover and Aston Martin as customers.

Mr McGladdery said the company's competitors were mainly in low-wage economies "in countries with scant regard for their citizens or their environment", whereas Polytec Holden was a responsible employer which would like to remain in Bromyard.

Mr McGladdery said: "I believe that if houses are built close to our boundaries, this will result in a conflict of interest. I expect that any resolutions to such a conflict of interest will be expensive and will ultimately cause the transfer of operations and jobs from Bromyard."

Tom Bals and Graham Povey, managing directors of Micron, fear that if the housing development goes ahead they too may have to relocate, as they similarly work long hours to export goods.

Both firms say when homes were previously built near their factories, their operations attracted complaints and they had to carry out expensive reorganisation of facilities.

They are urging the Bromyard Town Council to support existing businesses and to attract other businesses by retaining the industrial zoning.

Herefordshire Council will decide whether to accept the inspectors recommendations later this year. The UDP is due to be adopted next year.