Keighley market traders are angry that Bradford Council plans to hold a street market in adjacent Low Street.
They say the November 20-22 market will snatch their regular customers and skim off Christmas trade.
And traders believe Council cash spent on the street market should instead be used to improve facilities in their run-down building.
But the Council believes the street market, coupled with the first Keighley Pot Fair from November 17 to 22, will attract more people to the town.
It has invited Keighley market traders to have stalls at the outdoor market alongside visiting traders from across the UK and Europe.
Keighley Town Council chairman Nancy Holdsworth agreed that the street market could have a beneficial effect on existing traders.
But she said it was important the Council provided entertainment in the covered market to attract people inside.
Bradford Council offered the pot fair and street market to Keighley following similar events held successfully in Bradford, Ilkley and Saltaire.
It admits some items sold on the street market will be similar to those sold on the existing Keighley stalls.
The Keighley traders say they are against "here today gone tomorrow" traders promoted and subsidised by Bradford Council.
Spokesman Nicky Nutton said: "The money should be spent promoting this market to Keighley people. It's unfair competition. We're here 12 months of the year."
Bradford Council's corporate scrutiny committee held a special meeting this week to discuss whether the street market should go ahead.
Chairman Councillor Glen Miller, who represents the Worth Valley, was responding to a petition from market tenants objecting to the outdoor market.
The committee rejected the objection but called for detailed research afterwards to gauge the market's effect on nearby traders.
Coun Miller said previous events had attracted up to 35 per cent more people on market days, and 20 percent more in subsequent days. He said: "I sympathise with the concerns of the market traders, but it's going to bring more to the market than it's going to take away."
Coun Miller said that far from neglecting the market, Bradford Council was spending £600,000 on improvements.
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