The council's Labour group has insisted on the issue being debated again and a local pressure group has accused the authority of inadequate public consultation.
But council leader Coun Russell Forsyth made a robust defence of the authority's approach and pledged that the public would be involved in any future decisions.
The controversy reflects anxiety over the future of Fleetwood's green seafront which is identified in the masterplan as "a major development opportunity for a mixed-use scheme."
This is despite plans for flats on one of the pitch-and-putt courses being rejected last year.
The seafront issue will now go before an overview and scrutiny committee for further discussion.
Labour group leader Coun Clive Grunshaw said: "Wyre is in denial about the proposals for housing on the site of the Marine Gardens and Fleetwood Leisure Centre.
"Their aim is to move forward with this once the housing market has improved. This is not acceptable.
"Fleetwood's greatest asset is its seafront and these proposals will destroy it forever. If this is not their intention then why designate this area for housing?
"Wyre's ruling Tories, none of whom represent a Fleetwood ward, need to be honest about their plans for Fleetwood's seafront."
There was also anger from chairman of the Fleetwood Action Group Tom Norton, who said there should have been a second round of public consultation over the masterplan.
He said: "We will keep going until we get a public meeting where there is consultation for the whole of Fleetwood."
He was also concerned that the council's bid for government grants under the Sea Change scheme could involve housing.
But Coun Forsyth said that there was no such possibility because Sea Change cash had to be for arts and culture projects.
He said no further masterplan consultation was necessary because the housing plan had been dropped after public pressure and little else had changed.
He said: "Nothing has changed. All we have done is withdrawn the part that got people excited. No-one objected to the part that has been accepted.
"I want to see the regeneration of Fleetwood in the same way we have done at Cleveleys.
"Unfortunately, we have not got the money. Some other council in the future, when financial things improve, will be more fortunate than we are at the moment.
"But when it is looked at again there will be full public consultation."