Mickey Mouse has got himself into an ugly spat with the neighbours at his Magic Kingdom in California.

The Walt Disney Company is fighting plans backed by the local council to build social housing near the original Disneyland, in Anaheim. The famous theme park is one of the most popular tourist destinations in America, attracting more than half a billion people since it opened in 1955.

Disney has gone to court to block the housing plan – the first time that it has sued its host city – and collected enough signatures for a ballot initiative to overturn it. In response, local activists have taken to the streets dressed as Disney cartoon characters to protest.

The family orientated company is accused of blocking the construction of affordable housing. “They do not like to be seen as the iron-fisted Mouse,” said David Koenig, author of Mouse Tales: A Behind-the-Ears Look at Disneyland and a forthcoming book on Walt Disney World in Florida. “Sometimes I am critical of Disney, but I think they are right this time.”

The row focuses on the redevelopment of two trailer parks adjacent to land on which Disney intends eventually to build a new theme park.

Disney’s opponents say that the redevelopment will provide low-cost housing for poorly paid Disney staff and others priced out of the market by the Californian property boom. Lorri Galloway, a local councilwoman who backs the redevelopment, said: “The majority of Disney’s employees make less than $10 [£5] an hour, which makes it extremely difficult to live in the city of Anaheim.”

Disney dismisses the protests about affordable housing as a canard. Its backers note that more people live in cheap mobile homes on the existing two trailer parks than would get low-cost housing under the redevelopment plan. “Our issue is not about affordable housing,” said Rob Doughty, a Disneyland spokesman. “We absolutely support the need for affordable housing.”

The theme park was opened in 1955.

Over the years the surrounding area declined until local officials feared that the blight would keep tourists away. In 1994 the city agreed to create a special resort zone dedicated to tourism on the 2¼ square miles around Disneyland. Disney joined the city, state and federal governments in pouring billions of dollars into the area.

Once-grimy streets were transformed into tree-lined boulevards with stylish adobe hotels. Disney opened a second theme park, called Disney’s California Adventure.

The two trailer parks – comprising about 300 mobile homes on 26 acres – were allowed to remain in the new tourism-only zone on condition that if sold they would be developed for a tourism-related use. Disney says that it hopes the land will eventually accommodate hotels for a theme park it plans to build across the street. But a local property developer, SunCal, persuaded the five-member Anaheim council to vote 3-2 to rezone the trailer parks for residential development. In return, SunCal promised that 15 per cent of the 1,500 new units – or 225 “ flats – would be low-income housing.

Talks between SunCal and Disney broke down this week. Each side is now backing rival community groups in what has become an increasingly bitter political fight.

The Committee to Protect and Defend Anaheim, supported by SunCal, posted a YouTube video of a Disney supporter talking about the “unsavoury people” attracted by low-cost housing. But the Disney-backed Save Our Anaheim Resort (Soar), led by the head of the local chamber of commerce, suggests that the developer stands to make a windfall profit from the change in planning designation because residential plots are worth $5 million an acre while commercial lots are about $2 million. Annette Mc-Cluskey, a Soar spokeswoman, says there is a danger that new housing will threaten the growth of the tourist destination because of a domino effect.

“With no real principles at stake, one’s decision on these matters comes down to personal preference,” the local Orange County Register newspaper opined.

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