Parents fear a "mini-town" set to be built in Coulsdon could leave children without a primary school near their homes.
Campaigners warn plans to build 650 new homes at the former site of Cane Hill Hospital, without constructing a new school, will force some youngsters to take lessons in portable cabins and others to trek to schools far afield.
They have called on Croydon Council to put the brakes on the development until its impact on the local area has been more thoroughly assessed.
Barratt Homes wants to build 26 one-bed, 95 two-bed, 249 three-bed, 202 four-bed and 78 five-bed houses and flats at the site over the next five years.
The developer forcasts the plans will create the need for 130 primary and 64 secondary school places, fewer than the council says is required to make a new school viable.
Norma Maynard at the Cane Hill site
But Coulsdon resident, 46-year-old Norma Maynard, said: "I am surprised that the council accepted that maths.
"Maybe one of the reasons Croydon has a schools place crisis is because we keep listening to assessments from developers that underestimate how many children will live in their homes.
"We're talking about 650 homes. This is a mini-town in itself. Anybody I've spoken to can not believe that that does not call for a primary school."
Mrs Maynard has launched a campaign - Save Coulsdon - calling for proper scrutiny of the plans.
Croydon Council there was no short-term need for a new school and children living at Cane Hill would be accommodated in bulge classes at existing schools.
Mrs Maynard fears that will mean temporary classrooms, as well as traffic chaos.
She called on the council to delay planning permission for the site - part of the Coulsdon Masterplan - until residents' views and a traffic assessment have been considered.
She also criticised plans to tarmac over Lion Green Car Park to allow a new supermarket and doctors' surgey to be built.
She said: "The people of Coulsdon are about to get hit with loads of traffic, loads of people with no school to go to, none of the leisure facilities we were promised and their car park done away with."
Mrs Maynard has written Mayor of London Boris Johnson and Croydon Council leader Mike Fisher to express her anger.
An early glimpse of what the homes could look like
Councillor Ian Parker, who represents West Coulsdon ward, backed the Cane Hill development but said: "Our support is not unconditional though, and already many of the concerns of local people have been addressed through ward councillors, for example clarifying educational provision and paying attention to the real concerns about highway issues, particularly on Portnalls Road."
He added the council's current priority was to create school places further north in the borough.
He said: "The council is currently planning places for children in Sep 2014, well before the first Cane Hill children. The places the council are planning are mainly in the north and centre - because that's where the real pressure is right now and for the next few years."
Fellow West Coulsdon Councillor Jeet Bains assured residents the council would monitor demand for school places.
He said: "Cane Hill will be developed in phases, so there won't be 650 homes built in one go and therefore the initial need for school places may be accommodated in existing schools.
"However, a full assessment is under way and if a new school is required then that will need to be acted upon."
Cane Hill Hospital, which closed in 1991
Barratt Homes said it would contribute £9m to the council's school expansion project.
James Watson, managing director for Barratt Southern Counties, said: "As we understand it, a full assessment of local education needs has been undertaken which has revealed that the site does not generate a need for new primary school."
The proposals will go before the council's planning committee later this year.
A petition launched by Mrs Maynard calls for the Coulsdon Masterplan to be "robustly scrutinised" before any part of it is granted persmission.
It had been signed by 272 by Thursday morning.
Demolition of the hospital concluded in 2010
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