Three town councillors - two of them also district councillors - joined a demonstration on Tuesday against the proposal in Chase Meadow.
They said that even a local school says it would not be able to accommodate the extra children.
And people in the area have been approaching the councillors with a list of objections, after learning that up to 40 acres of land near the Severn Trent sewage works in Stratford Road had become an unexpected addition to the council’s list.
District councillor Michael Kinson brandished a placard which asked whether the council’s chief executive Chris Elliott would like to live there - between a sewage works and the M40 motorway.
Cllr Kinson (Con, Warwick West) said: “This is the completely wrong site for anybody to live and local people want to make their views clear ahead of any consultation period.
“Myself and district councillor Elizabeth Higgins have already received several letters of objection from people living on Stratford Road and in nearby Chase Meadow.”
Two other sites with approval are land off Europa Way and Leamington FC’s New Windmill ground where there are also problems.
Cllr Higgins (Con, Warwick West) said: “The bread and butter of Warwick is tourism with 775,000 people a year coming to visit the castle, many of them travelling in coaches from which they would overlook a Gypsy and traveller site on one of the main access roads into town.
“I’ve already had a message from a local school informing me they have no more room for extra children and we’re told the people living on the estate are already gathering names on a petition.
A spokesman for Severn Trent, which owns half the land along with the district council and another landowner, said it will object on the grounds that it thought the land was going to be earmarked for employment.
: “We were encouraged by the council to offer some of our site for employment land and then unexpectedly we were told it was being considered for a Gypsy and Traveller site.
“When consultation begins I think we would object that it is not an appropriate use of this location.”