Residents say they are vindicated by a landowners' apology for twice failing to tell them asbestos was found on a former factory earmarked for new homes.
The tests revealed contamination levels 23 times the HSE's limit
Michael Drogan, managing director of MMC Estates apologised for "confusion and concern" caused by its actions.
With developers Countryside Properties they want to build 650 homes on the ex Turner and Newall site, in Spodden Valley, Rochdale, Greater Manchester.
Campaigner Jason Addy gave a guarded welcome to the apology.
Countryside Properties also apologised for the "miscommunication".
MMC's analysts Encia told residents at a public meeting in May no asbestos was found in heavy "crush" rubble at the site - a claim repeated in an e-mail to a Rochdale councillor.
But it failed to reveal asbestos was found in soil samples and fine rubble.
"We would like to apologise to local residents for the confusion and concern our actions have caused since our purchase of the site in 2004," said Mr Drogan.
"Following the completion of technical investigations which have now been published, we recognise that there is significant asbestos contamination in areas of the woodland area and have evidence of pockets of contamination in other parts of the site."
Mr Drogan said the company was working with Encia to make the asbestos safe in conjunction with Rochdale Council.
Ian Kelly, managing director of Countryside Properties (Northern), said: "Following further investigations, we recognise that there has been miscommunication surrounding the levels of asbestos contamination across the site for which we would like to apologise."
He added the firm would not buy the site unless its suitability for housing was confirmed by the Environment Agency, Health and Safety Executive (HSE) and Rochdale Council.
Mr Addy said: "This has vindicated everything we have been saying over the past 12 months.
"We are shocked they have come out with this apology."
He said residents were calling for a public inquiry to get a fully independent investigation of the facts and the issues raised.
The Health Safety Executive said on Tuesday parts of the site were grossly contaminated.
Documents shown to the BBC last month revealed two tests found levels of asbestos 23 and 13 times the Health and Safety Executive's limit on the land.
The HSE's recommended limit for hazardous waste is 0.1%.
The firm's planning application in December 2004 had said there was ''a notable absence of asbestos at the site''.