The plan is the biggest development proposed in a national park.There would be almost 50 kilometres of road widening, big gun spurs on hilltops, and other buildings and structures.
Northumberland CC lodged an objection to the application.
Amanda Nobbs, director of the Council for National Parks, said she was delighted by the secretary of state's decision to hold an inquiry into what the government's own countryside advisers said was the biggest national park development proposal.
'And we notice that in the media there have been all sorts of questions asked about the direction of military training at the moment. Do we need rapid defence responses or large weaponry? The sort of weapons that we are now looking at have such large shooting capacity that we wonder whether there really is scope to train with those in a densely populated island like ours'.
Colonel Patrick Goldsbury, an MoD spokesman, said it was 'nonsense' to say the Army was planning to expand its training at Otterburn.
He explained: 'What we want to do is to improve the infrastructure to ensure that environmental damage is kept to a minimum. It is not to ask permission to fire AS-90 or MORS. We do that already'.
Col Goldsbury said the MoD wanted to build only about five miles of new roads or track. The existing roads were built at a time when vehicles were much smaller and much narrower.
'What we want to do is to widen the roads so they are safer for not just the army but also for the tenant farmers and everybody else who use them to drive on', he added.
Asked whether these bigger transports with weapons on them were strategically necessary, Col Goldsbury replied: 'Well, according to the government and the ministry of defence, yes. And until we are told otherwise or there is a defence review which says that we don't need them, we have a duty of care in the army to make sure our soldiers are properly trained.
'And what we are asking for - and what a lot of people don't seem to understand - is the bare minimum to train our soldiers and, in fact, a lot of people feel we are asking too little - that our soldiers deserve better than just the basic minimum'.
Col Goldsbury did not accept that the proposal could damage the environment of a sensitive habitat in a national park.
'Almost all of the Otterburn training area is under tenanted farming. The farming practices work hand in glove with the army. The army actually looks after the environment extremely well because our training area is not like Flanders Field or the Battle of the Somme.
'We need realistic habitats within which to train and, where we train and where the public is not allowed in the danger areas, you have an enormous diversity of wildlife'.
Miss Nobbs responded that national parks were places where the environment was supposed to be protected and where the public could enjoy it. A new approach had to be adopted by the army because the present proposals would completely destroy the character of the national park.