Friends of the Earth challenged ministers to act after Hertfordshire County Council gave the go-ahead for a new settlement west of Stevenage.
The environmental group said the development will create an almost continuous urban sprawl between Stevenage and Hitchin.
But a spokesman for the Department of the Environment said it would not intervene until the council gave formal notice that it intended to adopt the modified plan.
The spokesman added: "The Government has recently re-affirmed its commitment to protecting the countryside including Green Belt in relation to out- of-town developments and is currently carefully considering responses to a Green Paper on household growth.
"In doing so, the Government is committed to make the best possible use of brownfield sites and urban areas to create jobs, re-generate communities and protect the countryside."
FoEarth said more than 4,000 people objected to the scheme at a public inquiry and the decision was made in the face of opposition from the Conservatives, the largest group on the council.
Simon Festing, FoE housing campaigner, said: "Labour has consistently said it would protect the countryside. Ministers must overturn this disastrous decision and review their housing policies to stop urban sprawl and allow house-builders to use derelict land in towns and cities."