However, it said that did not "remove the company's responsibility to modify how it operates to meet the changing expectations of the community".
But company owner Michael Whittaker said yesterday the council's comments contradicted correspondence he had had from it on the matter.
"HBRC have made it very clear that they will ask for a court order to have us cease composting on site until all composting can be enclosed.
"This would cost the company many millions of dollars and simply be unaffordable.
"It is in fact [technically] impossible to enclose our composting, clearly HBRC are endeavouring to have the business cease operating, costing the region 120 jobs," he said.
Mr Whittaker, who was overseas last week when the council announced the prosecution, said the action raised a wider regional issue of "reverse sensitivity" where newcomers to an area complain about an existing operation.
"All city and district councils must do better at addressing the needs of existing commercial, horticultural and farming uses when allowing residential subdivision to encroach on to rural zones," he said.
"Residential subdivisions do not drive long-term growth in our region, it is businesses like Te Mata Mushrooms and many others that create the jobs and fuel economic growth."
The mushroom farm had been on its Brookvale Rd site since 1967 and in the past few years Hastings District Council had allowed more than 160 houses to be built nearby, Mr Whittaker said.
"We have heard many times that people were not aware of the mushroom farm when they bought their property. Developers, real estate agents and, I believe, council now have an obligation to inform potential purchases of our location."
With the legal action looming it was a "very unsettling and upsetting time" for the company's staff , he said, but he had been heartened by the public support shown towards the mushroom farm.
