Rugby MP Mark Pawsey joined residents and councillors in criticising the Heart of England Co-op for pushing-on with attempts to build on Oakfield Recreation Ground despite widespread objections.
Speaking in the House of Commons on December 13, Mr Pawsey said: "I'm sure the leader of the house [Mrs Leadsom] will be as pleased as I am that Rugby is delivering new homes at three times the national rate - with currently 17 sites for homebuyers to choose from.
"Yet, the Heart of England Co-op has chosen to push ahead with an application to develop a well established recreation area at Oakfield, in a part of the town with limited facilities, and against the wishes of the local community.
"I wonder if we might therefore have a debate about the value of retaining open space so that young people can enjoy the great outdoors."
Mrs Leadsom said: "I am very sympathetic to my honourable friend. As constituency MPs we all have to find that balance between meeting the housing needs and at the same time protecting green and outdoor spaces around us.
"The national planning policy framework that was updated in July does safeguard existing recreation areas unless there is clear evidence that its loss can be justified.
"And as my honourable friend knows, the planning system is locally led. So I do hope his planning authority have taken into consideration the strong-held views on the recreation area in Oakfield."
The Heart of England Co-op previously leased the site to Rugby Borough Council so it could be used as a park - but the Co-op fenced-off the land in 2016 when it failed to get planning permission to build homes on the site.
Rugby council has made repeated offers to buy the site, all of which have been declined.
On December 5 of this year developers McCarthy and Stone failed to get permission to build a retirement village on the park.
Both applications to build on the site were rejected on the basis they would constitute an unacceptable loss of open space.
Residents' group Save Oakfield has campaigned extensively to see the Co-op return the park to the people of Rugby, while this latest decision to reject plans to build on the site has prompted Rugby council leader Michael Stokes to call on the Co-op to 'end this long-running saga'.
This newspaper has previously reached the Heart of England Co-op for comment twice - but has not received a response.