A scheme in Sowerby Bridge has stalled because the town has become a pollution hot spot. And there are fears that future developments in parts of Hebden Bridge and Halifax could also be affected by the new planning rules.

Calderdale Council has created three air quality management zones to try to reduce the pollution caused by traffic fumes. The policy's first victim is a developer in Sowerby Bridge who has been told he cannot create four flats in the former Barclays Bank, in Town Hall Street, because the town centre is too polluted.

The other two action zones surround Market Street, Hebden Bridge, and Salterhebble, Halifax. According to head of planning Duncan Hartley, the council: "Cannot support new residential accommodation in an area of poor existing air quality in the absence of special circumstances. "Neither do any potential benefits of the proposal outweigh the concerns about air quality in Sowerby Bridge."

Pollution has been monitored in the town since 1999 and it exceeds the safety level set for nitrogen dioxide due largely to the amount of slow moving traffic on the congested Wharf Street. Councillors have until next Christmas to produce an action plan but in the meantime they can use it as a reason for turning down development proposals here and in the other two zones - although there is no blanket ban on building. "Air quality and the possible impacts on health are material planning considerations," said Mr Hartley.

Barclays Bank closed in August last year and S B Homes Ltd, of Manchester, wants to turn the ground floor into offices and the upper floors into four apartments. The developers claim the scheme will not create pollution and could actually help to reduce it as there are no dedicated parking spaces and occupants would have to rely, at least in part, on public transport.

Work is well under way on a new outdoor market and approval has just been given for 23 flats and a cafe-bar at Bolton Brow Methodist Sunday School.

Calderdale Friends of the Earth today backed the decision. Anthony Rae said: "We cannot continue piling more housing in when our roads are forecast to become ever more congested."