On former railway sidings at Grimsby docks in Lincolnshire, the seafood industry is backing new plans for an onshore salmon farm that it claims will create jobs, cut emissions and help meet the nation’s huge demand for the fish.

The scheme would be the UK’s first large-scale onshore salmon farm, with the fish growing to a weight of four or five kilograms. The project’s backer says the closed system would prevent disease and invasions of sea lice, which can blight open-net salmon farms.

But the project is now at the centre of a legal battle between North East Lincolnshire council, which approved the scheme in November last year, and animal rights campaigners, who claim it is a “new form of factory farming”. The animal welfare charity Animal Equality UK has successfully sought permission for a judicial review over the scheme, which is supposed to produce about 5,000 tonnes of fish a year.

Abigail Penny, the charity’s executive director, said: “To accommodate the extremely tight profit margins for a project of this nature, the fish must be crammed into crowded tanks and kept in artificial environments throughout their entire lives. Many similar farms have suffered mass mortality events, with thousands of fish dying due to failing equipment.”

Councillors who approved the scheme last year were told that concerns about fish welfare should be noted, but “are not considered to be material land use planning considerations”.

Animal Equality UK was granted permission for judicial review on 5 September after it argued animal welfare could be considered during the planning process and the councillors were misdirected by officials.

UK consumers spend more than £1.2bn a year on salmon in supermarkets and large retailers, making it the nation’s most popular fish. Farmed salmon is one of the UK’s biggest exports, but the operators of open-net salmon farms have been accused of having a “catastrophic impact” on fish welfare and the environment.

Charities and conservation groups in January called for organic certification to be removed from open-net salmon and trout farms, because of the “negative environmental impacts”.

The Scottish salmon industry says its farmers meet the highest international standards and are committed to protecting the marine environment.

The Centre for Environment, Fisheries and Aquaculture Science, a government agency, has highlighted the potential role of indoor tank systems, known as recirculating aquaculture systems.

It says these “closed-loop systems” minimise the risks associated with conventional fish farming such as pollution, parasites and escapees. An English aquaculture strategy published in November 2020 said there was growing investor interest in the land-based production of Atlantic salmon close to large English cities.

The proposed new £120m farm on the eastern outskirts of Grimsby docks is backed by the company AquaCultured Seafood. The business says the facility would “optimise” fish welfare and prevent disease or sea lice from entering the system. The scheme is supported by the Seafood Grimsby and Humber Alliance as a “stepping stone’ to UK food security.

A submission to the planning committee by Mark Borthwick, a doctoral fellow in salmon farming, warned the farm would require high stocking densities. He said salmon ranged widely with a strong migration drive and it was unknown how they would cope in the cramped conditions of an onshore farm.

His submission stated: “The industry’s hope is that by doing the whole operation under factory conditions, they can control disease. However, as has been abundantly established in other farming environments, there is no truly biosecure factory farm and other diseases will emerge.”

Edie Bowles, solicitor at Advocates for Animals, the legal firm representing Animal Equality UK in the case against the council, said: “I am delighted with the [judicial review] application being granted permission. It will hopefully be a wake-up call to other planning authorities that they need to follow the correct process.“This case is all about proper scrutiny being given for planning decisions that pose huge risks, including to animal welfare.”

The council said it would not comment while legal proceedings were continuing. AquaCultured Seafood has been approached for comment.