A proposed hotel and retail units site is again being opposed by a town council due to its potential to harm to nearby businesses.
Marston's, which owns the existing Thatchers Needle pub, aims to build on land to the rear of the pub on Park Road, but has suffered numerous rejections.
A report by retail consultants GVA for South Norfolk District Council in March concluded that the proposed units were likely to have a 'significant adverse impact' on the town.
The pub chain submitted a new statement in November in support of a fresh application, proposing conditions that would limit the size of the shops and specify types of goods that could not be sold, including clothing, health and beauty, and greeting cards.
Councillor Eric Taylor, who has lived in Diss for more than 35 years, said: 'Basically what Marston's have done is to produce a report of their own in direct conflict in many ways to South Norfolk Council's consultancy. What it boils down to is they are disputing just how much diversion the impact will be for the town. In fact they are saying it will be less than half what the council report said.
'The fact that they are saying they will restrict certain items from the retail units and they will not subdivide the units, although comforting to some at first read, could very easily be changed in the future.'
Mr Taylor, who prepared a report on the statement, added: 'What Marston's are proposing just to put it in a nutshell is probably about 2,500 square metres of retail space, and when you think that the strategy advice from the Greater Norwich Plan reckons that between now and 2027 there will just over 3,000 metres required in the whole of South Norfolk it shows to me how disproportionate it is.
'I do feel that we as a council need to reject or recommend rejection of this application in the strongest terms possible. I believe it will not only be bad for the town in the longer term because I think there will be more empty premises, but it would also be bad for the community in terms of the Neighbourhood Plan.'
Diss Town Council voted to object on the same terms as its previous objection. Reasons included that retail units would be detrimental to the town economy, and have a significant impact on traffic. A Marston's spokesman said the company had no comments to make at this stage.
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