Despite having no planning permission, construction workers moved on the area near Eskview Farm, St Cyrus, Aberdeenshire, almost two weeks ago and began levelling the terrain.
The development sparked a furious response from locals, who said they had no idea the land would be converted into a permanent site for traveller caravans.
The isolated farmland, which lies to the north of Montrose, is considered a Site of Special Scientific Interest and borders the St Cyrus Nature Reserve. As such, the land is subject to additional regulations which serve to prevent damage to areas of conservation.
Before building on designated SSSIs, developers must obtain permission from the Scottish Natural Heritage (SNH); however, a spokesman for the organisation confirmed no such consent had been pursued.
The gypsy developers have since applied for retrospective planning permission with Aberdeenshire Council and their submission is currently available for public consultation.
However, complaints from local residents prompted the council to issue a temporary stop notice at the site.
Site developer James McCallum claimed the outcry was based on a prejudice towards traveller families and had nothing to do with land conservation.