Local Labour representatives have criticised the decision to allow new housing at Pandy Road, Bedwas.
In September 2015 Caerphilly County Borough Council’s Planning Committee voted to reject the application for 300 houses at the site.
However, developers Land Matters Ltd appealed and the Planning Inspector has upheld the appeal.
The Welsh Government subsequently confirmed the granting of planning permission this week.
Hefin David AM and Wayne David MP joined local residents and councillors in expressing serious concerns about the impact of added traffic and congestion on the local environment and community.
Hefin David AM said: “I am hugely disappointed that planning permission has been granted for development at Pandy Road as it flies in the face of the views of local people, as well as the fact that the Council’s Planning Committee threw it out.
“Like local residents and councillors, I have serious concerns about the impact of extra traffic in the area on the local community, environment and infrastructure.
“I will now be working with the local community and Caerphilly County Borough Council to ensure that the Welsh Government does more to alleviate traffic and congestion problems that affect all roads leaving to the south of Caerphilly.”
Wayne David MP said: “I am extremely disappointed that the Inspector has decided to go against the views of local people and the Council's Planning Committee. I will now urge the Council to do everything possible to minimise the problems that will be caused by traffic congestion.”
In a collective statement, Bedwas, Trethomas and Machen ward councillors Liz Aldworth, June Gale, Derek Havard and Lisa Phipps said: “We are very disappointed with the result of the enquiry. This decision makes a mockery of the Planning Committee’s decision to reject planning permission for this site and shows the system is loaded in favour of developers. We regret that local residents and local elected representatives have not been listened to.”