Stormont has approved plans to create special economic planning zones, to be designated by the Office of the First and Deputy First Ministers (OFMDFM).
In effect, it would mean that OFMDFM would be in charge of planning policy in certain areas, rather than the Environment Minister, Alex Attwood.
The proposals were opposed by Mr Attwood and green campaigners, but supported by the DUP and Sinn Féin.
In a heated debate, 60 MLAs backed the change, with 32 voting against.
The creation of “economically significant” planning zones was discussed in the assembly on Monday, as part of proposed amendments to a new planning bill.
During the late night debate, Mr Attwood argued that OFMDFM did not have the operational ability to take on new planning powers.
He also said he had received legal advice that the new zones could run foul of European directives, as they did not exclude EU wild birds and habitats directives.
His SDLP colleague, Dolores Kelly, wanted to know why Sinn Féin and the DUP had not involved the environment minister in their discussions.
She said it was “another example of how the Sinn Féin-DUP junta does business” and that it was “all contrary to the Good Friday Agreement”.
Ulster Unionist Danny Kinahan said that, like many other people, he was “shocked, horrified when we saw the amendment”.
Basil McCrea of NI21 said that “they are at a single stroke going to do away with the Department of the Environment”.
“War has been declared on this assembly,” he said.
The TUV’s Jim Allister likened the amendment to an ambush on the environment minister and said it had to be “the most audacious power grab this house has seen for a long time”.
Mr Allister called on the parties opposed to the amendment to quit the executive” and force the issue of opposition in this house”.
Anna Lo of Alliance, who chairs Stormont’s environment committee, said she was “shocked” when she read the amendment to the planning bill.
She said the first time she had heard of the proposed changes was the previous week, and the committee had not had time to discuss it.
Ms Lo said it would give the DUP and Sinn Féin “the green light to approve fracking in Fermanagh” and said her party would oppose the amendment.
However, Sinn Féin’s Cathal Boylan said it was a measure aimed at “growing the economy” and would not pave the way for fracking.
Mr Boylan said it was about creating jobs and “trying to keep our young people here”.
The DUP’s Simon Hamilton said the amendment represented “another arrow in the economic quiver of Northern Ireland”.
He said his party had the right to bring an amendment at consideration stage.
Mr Attwood quoted from part of the economic pact agreed between Downing Street and OFMDFM earlier this month, which stated that: “The executive will establish a new process for economically significant planning applications and make new arrangements in relation to applications for judicial review of planning decisions”.
The SDLP minister questioned whether London should be able to use Northern Ireland “as a place to sample and test new law when it comes to significant planning applications and JRs (judicial reviews)”.