Manager of Killarney Town Council Tom Curran has said he will not act on last month's rezoning by councillors of 20 acres at the Gleneagle hotel against the advice of planners.
It is now open to councillors to put down a Section 140 motion under the Local Government Act which would force the manager to comply with their wishes.
A number of councillors who would only speak off the record yesterday said feelings were divided on the matter given the controversy surrounding an original rezoning attempt.
A majority of councillors passed the motion to rezone the land at the Gleneagle site 1.2 miles from Killarney town centre at a meeting in March. The land, with two hotels, holiday homes and a pitch and putt course, is owned by Fianna Fáil town councillor Patrick O'Donoghue and his family.
Mr O'Donoghue, managing director of the Gleneagle Group, is also a director of Fáilte Ireland and of Tourism Ireland.
Mr Curran told a meeting of Killarney Town Council on Monday that he would not act on the motion.
He said he had serious concerns about designating lands on the boundary of the rural area to the town centre. He had no problem with rezoning to tourism-related facilities in line with their current use.
He said his decision was not to do with ethics or the nature of the debate at the March meeting, but was "to do with sustainable development" for Killarney. Logically all the land between the town centre and the Gleneagle would also have to be rezoned.
The March vote is being investigated for a possible breach of ethics legislation by Mr O'Donoghue and Fine Gael councillor and employee of Mr O'Donoghue, Sheila Casey.
Ms Casey was one of the signatories of the rezoning motion and voted on the matter. Mr O'Donoghue admitted to lobbying councillors and stayed in the chamber during the debate. He abstained from voting and declared his interest in the matter.
The ethics registrar for local authorities in Kerry, John Flynn, has written to Mr Curran and to the mayor of Killarney, Tom Doherty, informing them of "a possible contravention" of Part 15 of the Local Government Act, 2001, which sets out the ethical framework for the local government service arising out of the rezoning motion.
It emerged yesterday that Mr Doherty has written to Mr Curran to say he will have to withdraw from any investigation into a possible breach of the ethics legislation. He was one of the signatories to the motion, although he abstained from the final vote.
Mr Curran said yesterday he was seeking legal advice on whether he could carry out an investigation on his own.