Proposals for 120 new homes in Aberdour are being drawn up as part of plans to build a new Hillside School.
The school for boys with behavioural problems is currently housed in a 200 year old building and director Anne Harvey would like to see it moved to modern, fit for purpose premises.
However, the site has not been supported for development by the Scottish Government in its examination of the draft Fife Local Development Plan, also known as the FIFEplan, which was published last week.
Draft plans for the school grounds are expected to go on display in the village at the start of next month, with details yet to be confirmed.
Aberdour Community Council has already spoken out against the development, stating it would breach the village boundary.
But Mrs Harvey said she believed the new houses would be in keeping with the character of the village.
Encouraging villagers to view the plans and give feedback, she said: “People need to go and see what the plans are and how they will fit in with their lives.
“I would not want anything to be detrimental to the village and I don’t think 120 houses would be too much for the village to cope with.
“We’re really just trying to raise funds to build a new school. We’ve got a 200-year-old building, with parts that were built in the fifties or sixties. We’ve got huge draughty classrooms.
“Hopefully, the new school will have smaller classrooms and be a more therapeutic setting.”
A Scottish Government reporter said in their examination of the FIFEplan: “I am not aware of any site at Aberdour having been identified in the current adopted local plan or in the proposed plan for relocation of the school.
“In my view, the absence of these matters means that the planning authority is not in a position to ensure that proceeds from residential development would be applied to construction of a new school at Aberdour.”
Aberdour Community Council chairman Arthur Lloyd said the Hillside School plans would involve breaching the village boundary.
“We’re not in favour of any development which breaches the current village boundary,” he said.
Shell has been consulted and confirmed that its pipelines run under the site.
The company said it would respond to the proposals after carrying out a detailed review.