The storm-hit Plymouth to Exeter line at Dawlish is being hit by a new threat in the form of new cliff-top homes, Network Rail has warned.
Teignbridge Council officers are recommending approval for the 31 homes plans by Developer Pegasus Life, subject to Network Rail lifting its objections.
The retirement homes are planned for the cliffs above the rail line that was closed for more than two months last winter.
Thirty metres of sea wall under the railway at Dawlish Station and iron railing were washed away in February 2014.
Pegasus called the plans an "excellent and appropriate concept for this wonderful location".
Network Rail told Teignbridge Council: "We have serious concerns that the proposal if permitted could destabilise the cliff. The area concerned has a high profile of cliff failures and associated rock stabilisation works having to be carried out.
"You should recall we recently had to shut the main line railway as a result of damage to the sea wall caused by storms.
"Before we were able to reopen the railway we also had carefully controlled sea cliff collapses and therefore we know there are potential issues in this locality."
Network Rail has threatened legal action if the scheme goes ahead and results in damage to the line.
The company warns: "Network Rail will consider any such failure and damage [to the railway line] as an act of nuisance and shall take all necessary action to seek redress for the damage caused and any financial penalties for closure of the railway through the courts."
Phillips, chief executive of Pegasus Life said: "We are committed to creating stunning homes that sit in harmony with their surroundings.
"Prior to our application, there was extensive consultation with the local community, and a high level of support was received.
"We will build the new homes in sensitive appreciation of the special landscape, including ensuring there is a 10m (33ft) exclusion zone from development by the cliffs and would only proceed when Network Rail have the assurances they need."
The council's planning committee is due to consider the application on 13 January.
