North Kesteven District Council wants to replace a car park with flowerbeds, paving, lighting and outdoor seating outside St Denys' Church in Sleaford.
A petition expressing widespread concern about the effect on the town's economy and cultural heritage has received more than 1,100 signatures.Wendy and Ken Hanslip, owners of Bellissimo Boutique, fear their business would struggle under the proposed changes to delivery and loading arrangements, which would require them to transport goods across busy roads.
The group said it had told the council closing the car park would "cause demonstrable harm to the ability of those businesses and organisations that rely on the current arrangement to maintain and service their premises and to attract visitors to them".