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The local representatives were “shoved” and “bullied” before being forced to accept a development within sight of the major tourist attraction, it is claimed.
Council Leader Christopher Saint said that the development “undermines Shakespeare and his history” as well as the “the setting of that internationally famous icon”.
The plans to build the properties alongside a primary school, health centre and row of shops in Shottery, Warks, were originally rejected by Stratford District Council.
Mr Pickles – despite being a champion of localism pledging to hand real control over planning back to local government – overturned their decision after developers Bloor Homes and Hallam Land Management appealed.
The decision of the Secretary of State for Communities and Local Government was this week ratified by a High Court Judge.
“We are surrounded by open land, we don’t need to use this space to build 800 houses, and if we hadn’t been shoved around it would never be happening, Cllr Saint complained.
The row has been brewing since 2005, he explained, when the proposals were “pushed” onto the agenda by a developer.
They were then “forced” onto the local plan by a Government planning inspector before being granted by Mr Pickles and then a judge.
“We have been bullied into it at all four stages,” Cllr Saint added.
“This is a sad day for Stratford and localism and a bitterly disappointing decision.
“At no time has the council or its members actively proposed development of this scale west of Shottery that undermines the setting of that internationally famous icon, Anne Hathaway’s Cottage.
“I am stunned that the aspirations of local people have been so roundly dismissed.”
The Grade I Listed building, the family home of Shakespeare’s wife, attracts more than 50,000 visitors from around the world each year, in an area where tourism generates around 8,000 jobs.
However, the high levels of employment in a relatively could be threatened if people keep “spoiling it”, said Cllr Saint, who added that they had identified other sites.
“The fact that it undermines Shakespeare and his history is important. We live in a day and age where we are aware of history and the need to pay homage to it, this generation values knowing about it and preserving it, and we assume that there will be a generation yet to be born that might appreciate us leaving it intact for them.”
Despite the objections of the council, Mr Justice Hickinbottom, sitting in the High Court in Birmingham, said on Wednesday that the decision to give the proposals the go-ahead had been “unimpeachable”.
The judge rejected the council’s argument that Mr Pickles had failed to comply with his own national policy on requirements for new housing.
A Department for Communities and Local Government spokesman said: “The courts have upheld the original decision. One of the key factors in that decision was that the local council had previously designated that site for development in its previous local plan.”
The current permission is outline planning permission, meaning that the land can be used to build homes, but the developers will still need to put in further applications to approve the specifics.
“Instead of brow beating us they have got to work with us so we will try to get the least worst option,” Cllr Saint said.