Suggestions that there may be any kind of future housing on the area now known as the waterfront have angered many residents in Fleetwood, as well as community leaders.
Earlier ideas to build on the pitch and putt were shelved after a public outcry that the town's "jewel in the crown" would be spoilt forever.
But Wyre Council leader Russ Forsyth argues although the seafront is presently unspoilt, its vast potential is not being sufficiently utilised.
That means there are insufficient attractions on the waterfront to provide activities for local people and visitors. Mixed use developments would limit housing in the area, but provide enough to help pay for exciting new seafront facilities.
He said: "Fleetwood seafront has not changed since the 1930s.
"That was a time when the council of the time had the foresight to build the Marine Hall, the boating lakes and the pitch and putt, rather than just leave it as it was.
"It transformed the seafront to create some popular and well loved facilities.
"But that was a long time ago and life has moved on. There have been no real developments since then.
"If there are ideas put in place now for "mixed use", it allows for only limited housing, not large scale developments which would ruin the seafront.
"And that modest housing development would help pay for other kinds of things - leisure and retail activities which could be a real benefit to the waterfront."
Coun Forsyth pointed out that there had been great opposition in Cleveleys to the building of the new Vue cinema, the neighbouring pub and other developments there.
"Now, instead of those residents regretting the new facilities, many of them like what has been done," he said.
Gary Payne, Wyre head of planning, added: "Fleetwood's waterfront is an area of great importance and great potential.
"If there is mixed use it could help this area become a point of destination for locals and visitors.
"If there were housing plans which involved 10 storeys and drew a negative reaction, that would not be acceptable, but if the plans proved sympathetic with the surroundings and looked attractive, then that might be different."