Inspector Harold Stephens said the County Plan, which will be the blueprint for development in County Durham for the next 20 years, was "unrealistic and flawed".
The council had wanted him to reassess his findings but he has refused.
The authority has now said it will take that decision to court.
Ian Thompson, the council's corporate director of regeneration and economic development, said: "It came as a disappointment that the planning inspector has declined to reopen the examination.
"We maintain the plan offers the best prospect for economic growth and have explored every option and opportunity in our efforts to demonstrate this, which has included employing independent planning experts to review our business-backed predictions for growth.
"We now have no choice but to pursue this matter through the courts by way of a Judicial Review."
In the plan, the county council said it wants to build 31,400 homes and create thousands of jobs over the next 20 years, in a bid to attract more businesses and people to the area.
But Mr Stephens said the plan was "unsound" and assumptions about job growth were "very ambitious".
Durham County Council is seeking a judicial review after a planning inspector refused to re-examine his criticism of proposals for the county.