The site, the confluence of the rivers Teign and Bovey near Newton Abbot in south Devon, is home to an extraordinary diversity of wildlife, including kingfishers, sand martins, dippers and otters, as well as many ancient trees. The environmentalist David Bellamy has described the proposal to divert 1.2 miles of water as "an obscenity".
Wildlife groups are deeply unhappy with the plans, which they say will endanger many natural habitats and may increase the risk of flood damage. But the quarrying company, Watts Blake Bearne, says the proposal is vital to protect jobs and investment in the region.
A public inquiry was ordered by the Deputy Prime Minister, John Prescott, who said it raised "issues of wider than local importance". The inquiry started last month and is expected to last until September.
What makes the scheme so attractive to WBB is that underneath the current path of the two rivers lie deposits of what is known as "Group 1 light" ball clay, a high-grade mineral which is blended with other clays to make a wide range of products, including lavatories, sinks, tiles, spark plugs and even squash balls. WBB, which already quarries for clay in an adjacent site, says the proposal is essential for the company's future.
"If we can't use this clay, the consequences could be huge. There is no substitute for the quality of this clay," said WBB's environment manager Dawn Moore. "This is not about expanding our business; it's all about sustaining it."
The Devon Wildlife Trust, which is leading the campaign against the plans, disagrees. "It's the traditional thing to cry jobs when the environmental issue comes up," said the trust's director, Paul Gompertz. "They say there is a public need for this product but, if you don't use this clay, all it means is that we'll have to wait a little longer for our toilets to be made.
"This is not jobs against the environment, it's about jobs against profits. They could mine this clay without moving the rivers, but that would be too expensive for them."
The trust is also concerned that the confluence of the two rivers, which lies in a flood plain, cannot be diverted without grave damage to local wildlife. "It's an important area for otters and one little mistake could have serious consequences for salmon stocks in the river," said Mr Gompertz.
"It's a dynamic river and constraining it will change the nature of the habitat fundamentally. We don't think you could ever restore it to the kind of richness it has now."
WBB, on the other hand, says its case is supported by a powerful economic argument. The company employs more than 570 people, and last week the public inquiry was told that if the proposal was turned down, 90 jobs would be lost immediately.
The company has also promised to minimise disruption to wildlife by embarking upon a 20-year environmental management project. It says this will actually enhance the conservation value of the area, providing new wetland habitats for otters, and include the extensive riverside planting of trees and hedges.
WBB believes wildlife will not be affected by the project. It says it will create new foraging habitats for swallows and bats, an artificial otter holt on the new river and new nesting habitats for sand martins. It also says it will create new public footpaths.
It points to a similar case that occurred in 1970, where it moved the River Teign two miles south of the site of the present dispute and where it says nature quickly reclaimed lost ground. "At that time we just let the area recover naturally. To look at it now, there is no difference between that stretch and other parts of the river," said Ms Moore.
Mr Gompertz said such attempts could not work. "They're talking about 30 to 50 years' worth of clay and moving the river for all time. You just can't move things like rivers and get away with it," he said.
"The human belief that you can compensate for use of natural habitat is wrong."