According to South West Business, the controversy surrounds an access road for the site currently under construction, which the house builder was granted planning permission for, on appeal, in 2008.
However, Cornwall County Council, says Persimmon Homes does not have final approval for the highway.
It has imposed a stop notice, which gives the firm 28 days to comply before it can recommence work.
Persimmon's managing director Simon Perks said the problem centres on an overhead electricity cable which forms part of the preliminary works.
He said the firm had submitted plans for the access road in March, and was dismayed that it had taken the authority eight months to say it was unhappy.
“To have to wait until November we believe is unreasonable and unfair,” he added.
But David Edmondson, the council's development manager for planning and regeneration, said details imposed by the appeals inspector, including protecting trees and acoustic screening, had not been submitted.
Persimmon Homes will submit a plan of action to the council to address the issues.
The council's enforcement team issued the stop notice following a call from the daughter of an elderly resident on a nearby street.
Sue Allen, whose 85-year-old mother lives in a bungalow neighbouring the development, called the planners last Friday to warn that badgers were active on the site and that work was starting on a new access road linking it to the busy A390.
"The residents, many elderly and frail people in their eighties, are very upset by the activity going on," she said.
"The noise pollution is horrendous. The trees in mum's garden bordering the site have been knocked down and have died since the site was cleared and are now falling into her drive.
"No discussion has taken place with residents and having spoken to the council I realised that they were completely unaware of what was going on.
"I am furious and very disappointed in the whole process. We have been ridden rough-shod over by the developers and appeals procedure. We have to trust that systems are in place, but it is obvious that this is not the case."