Architects hope to "create an interesting view" by placing a sewage plant the size of 17 football pitches in the middle of a greenfield site.
Designers said by shaping a wastewater and sewage treatment works to reflect the contours of land in the South Downs, they would be enhancing the area.
Southern Water was told the grey space-age development, recently described as an "enormous cow pat", was considered a "carbuncle" by residents of Peacehaven.
A five-week inquiry is hearing an appeal by the water company after East Sussex County Council failed to decide on the application for the sewage plant at Lower Hoddern Farm.
Karen Roberts, an expert witness for Southern Water, said: "The architecture of the building is very interesting and, though it will have an adverse effect, it will also create an interesting view."
Matthew Horton, QC for the council, replied: "Interest-ing in that you will be looking for ET to pop out of its hatch?"
Designers would create knolls and hills, flatten the valley floor and plant scrubland and trees to accommodate and hide the 12-hectare plant.
Much of the operation to receive sewage and to turn waste into fertiliser pellets would be buried underground, the inquiry heard yesterday.
Mrs Roberts strongly defended the project.
She argued the greenfield land was "certainly not the worst site" she had come across for a sewage plant.
Concerned residents, many with homes bordering the fields, have protested about the smell, noise, traffic and visual impact the plant would have.
Mrs Roberts said: "We don't underestimate the difficulties of accommodating a development of this scale at this site.
"We are trying to make the best of something that's extremely important, providing something that's necessary nationally and regionally and has environmental benefits."
Lottery cash distributor Sport England has accepted plans to build football pitches around the plant if it is built.
Mrs Roberts said a bridge to keep heavy lorries transporting cesspit waste away from children, horse riders and dog walkers was not necessary.
Mr Horton said: "The exasperating thing about walking the footpaths in the vicinity of Peacehaven is that enough remains of how it used to be to make you wish more of it were so."
Mrs Roberts replied: "I think that's a very idealistic sentiment but we're dealing with the fact and reality here."
Jack Walker, of Keymer Avenue, Peacehaven, crossexamined Mrs Roberts and accused her of repeatedly down-playing the environmental impact of the sewage works.
He said: "How would this carbuncle enhance the area?
"Do you give any consideration at all to the opinions and needs of residents or do you simply ignore them?"
The inquiry will help Secretary of State Ruth Kelly decide whether to approve the plant.
Statements from protesters will be heard at a session of the inquiry on Wednesday at the Meridian Centre at 7pm.
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