Jim Telfer can trace his roots on the rolling farmland outside Edinburgh back to 1915, when George V was on the throne and Allied troops were in the middle of the disastrous Gallipoli campaign. Three generations later and Telfer, 82, is still up before daybreak tending to the newborn lambs that gambol round his smallholding.

But all this, he fears, may soon be taken away. Hollywood A-listers could next year be roaming the land after plans to build Scotland’s first purpose-built film studio were approved in principle by ministers.

Telfer, however, is refusing to budge. “I’m not moving. No, no, no. There are other places to go for the film studio,” he said as he tended to his two-day-old lambs.

He and his daughter, Mary Begbie, 52, are prepared to go to the supreme court to fight any attempt to build the £250m facility on the 24-hectare (60-acre) plot where the family have lived for more than a century. “We will fight it to the utmost,” said Begbie.

“To lose it would be devastating, hugely to ourselves but to the community – and for something that could be built elsewhere. There’s absolutely no need to be destroying prime agricultural land for this development when there are alternatives.”

Telfer and his mother were born in the farmhouse first occupied by his grandfather in 1915. Although the family own the farmhouse and buildings, they do not own the land – it belongs to the Gibsone family, descendants of the local landowners who signed the original lease to Telfer’s grandfather.

Nick Gibsone, an advertising executive, wants the Telfers to leave the farm so he can turn over his land to the Hollywood studio.

Friends of Gibsone said he had made a number of offers, including a £250,000 compensation package that would allow Telfer to continue living in the farmhouse “until his death”, at which point Gibsone would seek to take control of the smallholding.

But the two sides have been locked in stalemate for almost a year, with bitter accusations of bullying and threats of eviction angrily denied by Gibsone. Sources said any move to evict the Telfer family would have to be approved by the Scottish land court, which can rule over disputes between tenant farmers and landlords.

“At the end of the day money doesn’t mean anything to Dad. He’d rather keep on farming and keep the farm for the community,” said Begbie, who lives on the farm along with her mother, father and her daughter, Nicolle. A banner reading “Save Jim’s Farm” hangs on an outhouse where thousands gathered last year to protest against any potential eviction.

The prospect of leaving the farm is almost too painful for Telfer to contemplate.

“I was born there. I could never come back to the place. I could never come back,” he said tearfully. “I could never face the place again, I could not do it. Whenever I wake in the middle of the night I think about them. It’s in the back of my mind all the time.”

Begbie said the family were devastated when Scottish government ministers approved the film studio plans in principle last week. They overturned a previous recommendation by a Scottish government reporter, who said permission should be refused because it would “cause significant adverse effects on the character of the local landscape”.

Ministers said the economic and cultural benefits of the studio outweighed these concerns.

The ambitious scheme is Scotland’s boldest attempt yet to lure lucrative Hollywood blockbusters. The country’s creative sector has for years lobbied the government for a purpose-built film studio to compete with the rest of the UK, seen increasingly as the filming destination of choice for hit TV series such as Game of Thrones.

Willy Wands, chairman of the Association of Film and Television Practitioners Scotland, claimed in January that Scotland’s lack of a studio was “absolutely a factor” in the new Star Wars film being filmed in Ireland instead.

The latest Avengers film, starring Robert Downey Jr and Scarlett Johansson, is being filmed in Edinburgh, with a staged explosion on the Royal Mile thrilled celeb-spotters in the city earlier this month. But industry commentators point out that all the studio filming for the movie is being done in Atlanta, with pre- and post-production in the US.

The proposed studio complex for Telfer’s smallholding will be built in phases and will eventually feature two backlots, six sound stages up to 70ft high, a hotel, visitor centre, film academy, workshops and a creative industries hub.

It is claimed that up to 1,600 jobs could be created by the project, whose first studios are hoped to be operating by the end of 2018.

In a statement, Gibsone said: “This has been a difficult period for all concerned but we maintain we have acted in good faith and tried our best to reach a compromise that can work for everyone concerned.

“We are not a wealthy family and it is now a necessity that we sell the site which we own. A proposal has been made that would allow the tenants, Mr and Mrs Telfer, to remain in the farmhouse, with some alternative land to farm plus substantial compensation.

“Since last June, we have asked the Telfer family to participate with us in independent mediation so that we can discuss this proposal. Whilst we have yet to receive a response to the offer of mediation, it is our sincere hope that this is the chosen path for both parties.”