Mark Snee, managing director of Morley-based Technoprint, launched a court challenge to the permission granted for the flats in February.

He requested details of the delegated powers under which the planning officer gave the permission. However Leeds City Council has been unable to do so, and further investigation brought three years' of planning decisions by the council into question.

Snee told PrintWeek: "It is a mistake to lose smaller business sites. Once you drive businesses out of an area, I do think you will have extra problems with social cohesion.

"The plot isn't big enough for 12 flats. Careful thought has to be put into the loss of a local employment base. A lot of people will choose to set up a small-scale enterprise; most of us in print started as a small-scale business."

The council insists that its 'Scheme of Delegation', which is approved at its AGM, was not approved formally between 2004 and 2007, the council "adopted a rolling and an annual review of the constitution by committee and amendments were approved by the Annual Meeting."

It claims that not affirming the scheme was no more than a "procedural error".

Paul Greatorex, acting for Snee, branded the council's case "an elaborate plea to avoid the consequences of its own failings".

The case was heard at the High Court last week. Mr Justice Wyn Williams, residing over the case, has reserved decision until a later date.