Plans to build a "gargantuan" new 30 home estate on the former Harpenden House Hotel site have been slated as "totally out of scale".
Fairview Homes held a three day consultation revealing potential plans for the listed building last week, which could be turned into around 30 new "high quality homes".
Barry Watson, who lives in Arden Grove just behind the proposed development, said he was "appalled" by the concept.
He said: "The plan for the development is totally out of scale with anything else in the area.
"When the hotel itself applied for a three-storey extension it was refused two or three times, on the basis that the height of the extension must not exceed the listed building and they ended up building the two wings."
Mr Watson said the new proposal is to build 32 residential units and 71 parking spaces.
The listed building would be divided into five roomy apartments, five detached houses, a two storey block of eight flats and a four storey block of 14 flats on the highest point of the site.
Mr Watson, a retired chartered engineer, said that he is not opposed to development, but not to this scale.
He added: "Harpenden House Hotel is not just another listed building, it is a Grade II*, considered to be particularly important nationally.
"This enormous barn of a building on the most elevated part of the grounds would dwarf the ancient hotel and forever change its setting. From Arden Grove the townscape would be dramatically altered, with the nearby end of the block reaching more than twice as high as the existing houses.
"Ideally I would love to see the site stay open as a hotel."
Since customers were told on Valentine’s Day that the 300-year-old hotel would be closing its doors to build flats, residents launched a Save the Harpenden House Hotel petition, which has already collected 1,656 signatures.
Petition organiser Hilary Taylor said the town definitely still needed a hotel and she would be "very disappointed" if the current plans went ahead.
She said: "At the moment the proposal is entirely inappropriate. I am sceptical of people saying that there no market for a hotel in the town - I believe there is. We need something to replace to lost employment opportunities. The development as it is would not look good and would overlook the town and common.
"We need the facility and this has been emphasised by the amount of support on Facebook and the petition.
"This is another step towards Harpenden becoming an overcrowded commuter place with to infrastructure to cope."
The campaigner said that Harpenden needs a town plan because at the moment the town is at the mercy of individual planning applications.
A statement on Fairview Homes website said they were still at the pre-application stage and no planning application had been submitted.
They plan to submit a detailed planning application in late summer following "extensive consultation with all interested parties".
The consultation can be found at: http://harpendenhouseconsultation.com/.