A decision to reject a major redevelopment was made following continuing concerns over highway safety.
The proposals for the former Dorma factory site would see 182 new homes built together with business space and a creche.
However the access to the site would be from a narrow lane with no footpath and would be the main pedestrian route into Chinley.
Cllr Alan Barrow said he had stood at that junction and would not like to walk into the village, particularly with a pushchair or small child. “It is totally unacceptable. That alone it something we really need to get the applicant to address before anything else is considered.”
Committee Chairman Cllr David Mellor said: “I wouldn’t like to set off over that bridge, up the hill and round the corner with no pavement.
“Would you want to do that?”
Cllr Graham Oakley said: “That road is just not suitable for pedestrians”.
The meeting of High Peak’s Development Control Committee was told the independent highway consultants instructed, following their request, said the amount of traffic that would be generated would be significantly higher than when the site was used as a factory.
But Mark Hourigan, on behalf of the applicants, said the scheme was acceptable in highway terms and would secure significant benefits.
He said the £40 million investment would regenerate a brownfield site, provide 55 affordable homes and see funds provided for the school and health services.
Ward Councillor Audrey Bramah said: “We don’t have the infrastructure for a development of this size.”