Stanground residents submitted a petition signed by more than 3,000 people demanding Tenter Hill Meadow be saved from development.
The petition handed in at Full Council calls on the authority to re-consider an appeal against plans for 18 flats on the land.
The developer Medesham Homes is part owned by the council. It lost the planning application in November but has since lodged an appeal that could cost Peterborough taxpayers thousands of pounds if the matter goes to court.
Housing cabinet member Cllr Peter Hiller, who is also a director of Medesham Homes, said: “To date lodging the appeal has only cost Medesham Homes £1,700 of its own money, and to suggest that it will cost Peterborough taxpayers hundreds of thousands of pounds is quite irresponsible.”
No date for the appeal has yet been set.