Worried parish councillors in Kidlington believe plans to build 15,000 new homes north of the village would be a disaster for local businesses.
Parkridge, the developer behind the proposed eco-town near Weston-on-the-Green - dubbed Weston Otmoor - has organised a series of roadshows across the county to win over the public.
But Kidlington Parish Council contacted the Oxford Mail last night with grave concerns about the whole project.
Parish councillor Andrew Hornsby-Smith, also a member of Weston Front, the campaign group set up by Weston-on-the-Green residents to oppose the eco-town, said vital resources would also be directed away from Kidlington if the plans got approval.
He said: "If you give people a choice between taking a tram to take a train to take a bus to get to work in Oxford, or drive along the A34, they will drive along the A34.
"Why would people choose to live by the A34 and M40, if it wasn't to commute to different places by car?
"The A34 will be jammed and that will have a knock-on effect on businesses in Kidlington and the hauliers who use the road. If you block that road with traffic you screw industry for the South of England."
However, the parish council's primary concern was that the eco-town would stunt growth in Kidlington, the county's largest village.
Mr Hornsby-Smith explained: "In Kidlington we have put forward to the district council plans for 1,300 new homes on the basis of a local consultation last year.
"People want better shops and better facilities in the village and we need more houses to deliver what they want.
"The problem with Weston Otmoor is that the houses built there can be offset against the Government targets for the whole of Oxfordshire.
"Our work for Kidlington would be undermined by the eco-town.
"Weston Otmoor is in a far less sustainable location than Kidlington, which is on a premium bus route to Oxford. We believe the proposed town is in a location that will generate substantial commuting. Much of that will be to the main employment areas on the eastern and south eastern fringe of Oxford."
The deadline for Parkridge's consultation is Friday, August 29, after which the Government has said a shortlist of up to 10 eco-town sites will be announced.
If Weston Otmooor reaches this stage, Parkridge has promised to consult local people and stakeholders once again.