Scottish councils ignoring the needs of travellers have been accused of “institutional racism”, as one council is warned by the human rights watchdog that two published objections to a planned site owned by a traveller are both racist and defamatory.

The bitter dispute between residents and a travelling family, which has seen the Equalities and Human Rights Commission intervene, is on a patch of land between the East Ayrshire villages of Waterside and Moscow. The large plot is owned by the head of the family, William Johnstone, who wants planners to allow a change of use on his land to allow him to put four gypsy/traveller pitches, together with lighting, fencing and amenity blocks.

The proposal, which has still to be decided by East Ayrshire Council after more than a year, has seen dozens of objections from residents, as well as from two local community councils, former provost Stephanie Young and the environmental protection agency Sepa. A council spokesperson said last night: “This has gone back out to consultation following the provision of further information from the applicants.”

By contrast, another development less than 100 metres away across A719 road, has been approved for the construction of 26 holiday units and six accommodation pods on land adjoining Arran View Fishery.

Alan Seath, who is representing Johnstone in his planning application, argues that the conditions which applied to that development should apply to the proposed traveller site.

There are several strands to the objections to the Johnstone proposal, from road safety, environmental standards, the risk of flooding, education for children, to drainage and pressure on local amenities. There is just one house close to the site, in what is a rural area, however objections have been submitted by people living miles away in what appears to be an organised campaign.

Both Fenwick and Moscow and Waterside Community Councils have objected to the plans. "Much has been made of human rights for Travellers," Moscow and Waterside council said, "but human rights apply to both the local, settled, rural community and to minority groups. All should be made equal before the law."

A raft of objections from Fenwick, three miles away, includes environment and road safety provision, the suggestion that the land could have been used for fly-tipping chemicals, and that the plans do not include proposals to offset carbon emissions. Sepa is concerned about the potential flood risk on the land.

The Herald on Sunday understands that objections by two local people, deemed racist, discriminatory and libellous, were referred to the equalities body, the EHRC who raised it with the council. Parts of two objectors' statements, which can be accessed online, have been blacked out. The council did not respond.

East Ayrshire is one of eight Scottish councils, out of 32, which does not provide a site for travellers. Others include Glasgow and East Renfrewshire. Under the 2001 Housing (Scotland) Act councils are required to assess local demand and meet the required need.

Traveller and campaigner Davie Donaldson accuses some of them of “deliberately ignoring travellers’ needs” in what he claims is “nothing short of institutional racism”. He adds: “I know of councils where they claim there are no travellers and where I could name at least 40 families.”

According to the 2011 census, the first one to include a "gypsy/traveller" response, there were 4,212 who identified themselves as travellers. But that is vast under-estimate, claims Donaldson. “Travellers don’t tick the boxes. The general agreement between NGOs working with them is that the real figure is fifty to sixty thousand.”

There are just 500 permanent pitches for travellers in Scotland and, according to a report by the Scottish Housing Regulator in October, more than half the sites in Scotland failed to meet minimum standards. Councils which failed to comply included five sites provided by Edinburgh, two by Aberdeen City Council, one by Aberdeenshire Council and one by Fife.

Reasons for failure included facilities and amenities, essential fabric, safety and security, occupancy agreements and fair treatment.

Travellers who are given permanent pitches pay both rent and council tax. The average rent is £67 a week, although the range is from £45.52 in Argyll to £90.36 in Perth and Kinross.

In a follow-up report this month the housing regulator said 11 of 27 sites had still failed to improve to the minimum standard and warned that they must get them up to scratch or face a formal intervention.

Donaldson argues that all councils should be required to provide permanent sites, and that the waiting list for a pitch is at least five years. “The last permanent site was built before I was born. Travellers don’t just face racism and discrimination they suffer from massive health problems and inequality. There’s been very little improvement since the Eighties. Sites are often dilapidated and poorly managed.”

At eight of 12 sites visited by the housing regulator there were no site managers present and residents at four sites said they had not seen a manager for months.

“We are treated in a way which would never be accepted by any other community,” says Donaldson.

He argues that there are three requirements necessary for travellers. Housing, for the elderly or the infirm, sufficient permanent pitches to meet demand, and negotiated stopping places.

“Travellers have ancestral stopping places where they and their forebears have been visiting for a thousand years. But more and more of them have disappeared, which is why you get unauthorised stops, which causes friction with the settled community and is bad for community relations. Where they are closed we have to pull up where we can. We’re blocked at every turn.”

He also rebuts criticism that travellers leave mess at places where they stop. "We used to be able to deposit rubbish in the bins in lay-bys but they've disappeared. Or at council dumps. But we drive commercial vehicles so if we can get in, which is unusual, we have to pay commercial rates, but almost all the time we're turned away because we don't have an address in the council area."

John McFadzean is one of the councillors for East Ayrshire's Irvine Valley Ward, which covers the proposed proposed site. He is a former chair of Fenwick Community Council. However, he said that he was unable to comment as he was on the council planning committee, that the proposal had not come before the committee and he did not want to prejudge it. Since he had been elected to the council he had recused himself from any discussion at the community council.

There are now three caravans and hard standing on the site and one local resident, who did not want to be identified, claimed they had been there "for months", in breach of planning permission. East Ayrshire Council is now seeking enforcement action against Johnstone through the sheriff court.

Donaldson and other representative of the gypsy and travelling community have met with the Scottish local government organisation Cosla and also the Scottish Government's Ministerial Working Group on Gypsy/Travellers. A draft action plan from the group is expected by the end of this month.

"We've had people from the community giving evidence in reports for years now," he says. "The Government are very good at doing reports but they're not very good at putting their hands in their pockets when it comes to fixing the issues."