Stafford Borough Council’s planning committee referred the detailed application for land off Fairway back to St Modwen for a redesign in July.
Councillors had raised concerns including the location of affordable homes next to the commercial area, garden areas that did not meet minimum size guidance and flooding issues.
The application returned to the committee on Wednesdaywith a series of revisions, including a landscaped buffer between the commercial and residential areas.
The number of homes proposed has been reduced by one, from 214 to 213, and the number of four bedroom properties had been reduced by 11, with one extra two bedroom and nine more three bedroom homes planned.
Wednesday’s committee meeting also heard that a registered housing provider had now agreed to take on the affordable properties
A report said: "The revised layout now proposes garden sizes to all dwellings which meet the guidance set out in the Council’s design SPD (Supplementary Planning Document).
"Whilst the overall layout is broadly the same as previously considered, this improvement has been achieved as a result of changes to the house types and the loss of one unit. An amenity area is now also proposed to the flats adjacent to the proposed local centre.
"The car parking arrangements for a number of plots have been adjusted to reduce the amount of frontage parking across the scheme.”
"It is considered that the amendments have improved the quality of the scheme and have addressed the main concerns raised by members at the Planning Committee meeting on July 15."
But committee members remained concerned that some of the affordable housing units were smaller than the national space standards. Six of the nine committee members present voted against approving the latest plans.
A proposal by Councillor Marnie Phillips to refer the application back to St Modwen, so that national home size standards could be met for all properties, was backed by seven committee members, with two voting against.
She said: "We should not be sitting here after last time saying we will not support an application that’s making people in our communities live in these kind of properties. Having anything below any standard shouldn’t be happening – this is a new development.
"There is no reason for this to happen other than pure and utter greed."
Councillor Jill Hood said: “Even one apartment put forward that’s too small is unacceptable. For these developers to say that something that’s only 493 sq ft is suitable for four people is outrageous and I don’t accept it.”