Building an incinerator at Newhaven would harm its economy and possibly damage public health, a public inquiry heard.
Former Newhaven mayor David Fitton told the hearing that plans to construct a burner at North Quay were bound to affect the town's regeneration.
He said businesses could leave, tourists might stay away and house prices could stagnate because of the incinerator's visual impact and fears over the health effects of emissions.
Councillor Fitton, representing Newhaven Town Council, said: "These perceptions are sufficient to damage the image of the town and are so strong they cannot be allayed.
"It would stick out like a sore thumb from various points of the town and beyond."
Coun Fitton said the incinerator could generate 500 lorry movements a day and building at Newhaven disregarded the proximity principle.
He said the town should not be expected to burn waste from larger communities, such as Brighton and Hove, Eastbourne and Lewes.
The inquiry is examining waste plans by East Sussex County Council and Brighton and Hove City Council, which identify North Quay and Mountfield Mine, near Robertsbridge, as potential incinerator sites.
The councils have already signed a £1 billion waste disposal deal with contractor Onyx Aurora, which proposes a single large burner at North Quay.
Timothy Howard, representing the councils, said a similar inquiry into an incinerator at Portsmouth found there would be little risk to public health.
He said good design could mitigate the visual impact of the burner.
The inquiry is scheduled to close next month. The inspector's report is not expected until the middle of next year.
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