Mark Hannaby BBC Wales political reporter

The Pwllheli marina expansion was rejected over the language issue

The local council next month launches a year long pilot in which developers will have to show the potential impact of their schemes on the language.

Councillors used the language argument to block a multi-million pound extension to Pwllheli marina.

The council leader is adamant that it will not deter investment and jobs.

But one chamber of trade has already expressed concern that the guidance may put off businesses from investing.

Under the scheme, developers will have to show their plans will not have an adverse effect on the Welsh language, or else their application may be rejected for that reason.

Proposals affected will include commercial, industrial or tourism developments of 1000 square metres or more, and developments of five or more homes on sites not already designated for such use.

Gwynedd is open for business and we welcome into Gwynedd people from all kinds of backgrounds and always will do. Council leader Richard Parry Hughes

Sixty nine per cent of people in Gwynedd speak Welsh - the highest proportion in any Welsh county.

But the 2001 Census showed Welsh speakers there had fallen three percent in the last 10 years

Plaid Cymru-led Gwynedd Council insisted it would still continue to welcome business, but language issues needed to be addressed.

Leader Coun Richard Parry Hughes said: "Gwynedd is open for business and we welcome into Gwynedd people from all kinds of backgrounds and always will do.

"But I think there is a planning issue here which we need to tackle and I think it'll be much clearer for people who are coming here and developers to get clear guidance on what's expected of them."

The authority argues that existing advice does not give planners enough ammunition to block developments which could harm the language and they were leading the way for other counties in Wales.

The council said it expected more assembly leadership on the issue

"We would expect the government of Wales to be actually leading on these kind of policies and they haven't been leading on them," said Mr Parry Hughes.

But the chair of Pwllheli's chamber of trade Paul Brett said they were worried that very viable investments into the area would be turned away because of the guidance.

"We need to see what's going to happen and how.

"If they implement it politically it could do a great deal of damage to the county economically."

Others who welcome the new guidance are worried about how wisely it will be applied.

Councillors have already used to language argument to block a �3.8m project to extend Pwllheli marina which had been approved by board members.

Martin Eaglestone, prospective Labour candidate for Arfon, said they had to hope that authorities like Gwynedd were "very sensible".