Collins, 53, best known for his 1995 hit A Girl Like You, has applied with his wife Grace Maxwell for planning consent to build the studio along with an adjoining three-bedroomed unit at Clashnarrow, Navidale, just north of Helmsdale, in Sutherland.
But neighbour Raymond Hunt, an engineer, maintains the new structure will totally dominate the nearby bungalow in which he lives with his wife and disabled daughter.
In an objection lodged with Highland Council, Mr Hunt states: "The proposed building is like a viewing gallery at a zoo looking down at the animals below, mainly us."
Collins, who formed his first band Nu-Sonics when he was aged 17, shot to fame after the band became Orange Juice. Solo hit A Girl Like You was a top 10 single in seven countries.
He almost died from two brain haemorrhages in 2005 and was unable to walk and speak for a time, but battled back and continues to perform.
His wife is his manager and the planning application is in her name.
Although the couple and their son live in London, they are frequent visitors to their Helmsdale home, which has been in Collins's family since 1820.
The couple want to build the recording studio and adjoining accommodation unit on a steeply sloping hill above the A9 just north of Helmsdale. The south- east site has magnificent views over the firth.
Permission is also sought to convert an existing building, known as Clashnarrow, which has been vacant for some years, into a storage unit for musical equipment and an office.
Designs for the new development have been drawn up by Matt Stevenson of Ardross firm Carbonlite Design and Build Ltd. He has come up with a dramatic glass structure on stilts, linked by a balcony to the accommodation unit.
Papers submitted to the council state: "This new development will create local employment and bring much-needed business to the local area from visiting artists.
"The aspiration is that the development could be a musical beacon, which will become the catalyst for a creative hub in the surrounding areas."
But Mr Hunt says the studio will only be 50ft away from – and 30ft higher than – his bungalow. He claims he will not be able to leave or enter his home without being viewed.
He is also concerned about noise from the studio and extra traffic on the single-track road that currently serves three houses including Clashnarrow.
He said: "All we are going to see is a building that is massive and ugly, totally out of character with anything else in the area. It will destroy my view from the north-east."
Mr Hunt also states that, on the plans submitted, his house appears further away from the proposed studio than is actually the case.
Collins's agent Matt Stevenson said: "We are confident all of the concerns outlined in the objection letter can be suitably allayed."
He added: "We would welcome the opportunity to meet with the objector on site, and will be contacting him within the next few days We believe this is a very positive development for Helmsdale."