Parkdean Resorts at Cayton Bay Holiday Park was forced to pull its planned 126-caravan expansion in 2018 after Scarborough Council planning officers raised concerns over its impact on a nearby kennels.
The area of land South West of Mill Lane in Cayton borders a property, Alma Farm Cottage, which is used as a home for more than a dozen St Bernards.
Earlier this year, Parkdean Resorts has returned with a new, revised application, with 122 caravans and changes to the layout of the site.
On Friday, Scarborough Council’s planning committee gave the scheme the green light.
The committee heard that distance to Alma Farm College from the nearest caravan has been doubled from 25m to 50m and that an acoustic fence would be installed.
Cayton ward’s Cllr Roberta Swiers that while she was happy with the changes, she still had major concerns about the development.
She said: “I am pleased the applicant has gone that one step further with the fencing and help for Alma Cottage.
"They have been breeding and showing at Crufts for 40 years so it is good it has been taken into accommodation.
“However, if you look at this holiday park from an aerial view then you’ll see it’s almost twice the size of Cayton and I’ve come to the point where I think ‘how much more?’
"We have no more resources but it is putting so much traffic on this small road.”
Her fellow Conservative Cllr David Jeffels said he thought the speed limit on the road to the caravan park should be reduced to 20mph.
The application from Parkdean said the development would "not only be seen as a major investment in the area, but also as a general enhancement of the holiday park”.
The owner of the Alma Farm Cottage, Diane Deuchar Fawcett, objected to the revised scheme.
In her objection, she stated that she chose the site to use as a Kennel Club-approved breeding location in 1980 due to the lack of neighbours.
She added: “One of the reasons I chose to buy my property is because big dogs do bark, and they start to bark from around 7am when they are let out each morning.”
The application was approved by the committee by nine votes to three.