The councils - whose case is backed by regional traders - are asking the court to overturn planning permission granted for the 300-acre 'shopping city' at Dumplington on the banks of the Manchester Ship Canal.
The councils' barrister, Robin Purchas, said the 'Trafford Centre' - if allowed to go ahead - would mean the creation of 129 shops, nine 'variety stores', two department stores and a food 'super centre'.
The project would involve the development of a new 'sub-regional centre' with some 10,000 parking spaces and a 14,000 seat sports arena.
Mr Purchas described it as a 'truly massive development' that would cover some one million square feet.
He told the Appeal Court that opposition to the scheme came from the eight local authorities and a body of local traders who fear the impact of the scheme on their livelihoods and who are helping to fund the case.
He said it was 'perhaps one of the most extensive developments proposed in this region, at least in recent years.
'The matter is of the very greatest importance so far as the region is concerned.'
The councils involved in the appeal are: Bolton MDC, Bury MDC, Manchester City Council, Oldham MDC, Rochdale MDC, Stockport MDC, Tameside MDC and Wigan DC.
Outline planning permission was granted by the Secretary of State for the Environment in March last year and was challenged in the High Court.
But in October last year Mr Justice Schiemann dismissed the councils' case ruling that the SoS's decision could not be legally faulted.
It is that decision against which the councils now appeal.
Opposing them in court are lawyers for the So S, the Manchester Ship Canal Company Ltd, Trafford MBC and the Trafford Park Development Company.
Mr Purchas argued that the SoS in allowing the scheme - due to open in 1997 - failed to have proper regard to the project's impact on traffic on the M63.
He added that there had been a 'failure to give reasons' by the SoS.
The appeal continues.