A 32-lot luxury home subdivision plan for the Herring Creek Farm in Edgartown cleared the final hurdle for approval this week, but if a complicated private agreement for the sale of the farm is completed in the months ahead, the subdivision may never be developed.

The private sale agreement involves five parties and is still only an agreement in principle. The reported sale of the 215-acre Great Plains farm has been the subject of much speculation in the Vineyard community in recent weeks. The speculation has been fueled by the leading spokesman for the farm trust, who has systematically revealed bits and pieces of information about the private sale agreement at public meetings during the last few months.

Yesterday the agreement in principle was confirmed publicly.

"There is a five-party agreement in principle and it's been signed," said Tom LeClair, a partner in Conover Real Estate in Edgartown who represents one of the private buyers for the farm. "This is contingent on several factors and all parties are diligently working on satisfying these factors; negotiations are continuing and at this point further comment would be counterproductive," Mr. LeClair added.

"I am pleased to announce that we have an agreement in principle as of today, and one of the parties to that agreement is The Nature Conservancy," said Stuart Johnson, the leading spokesman for the Herring Creek Farm Trust. The statement spilled out unexpectedly during a public hearing before the Edgartown planning board on Tuesday night.

The remark was in response to a surprise question about whether the owners of the farm had signed an agreement with the conservancy.

The day after the meeting, Tom Chase, who is the Islands program director for The Nature Conservancy, confirmed the agreement. "We have an agreement in principle but there are a number of contingencies that need to be satisfied. While we are hopeful, there is no guarantee, and we will know better a few months from now," Mr. Chase said.

The parties who have signed the agreement in principle for the sale of the farm include two private buyers, The Nature Conservancy, a fledgling local nonprofit called the FARM Institute, and farm owners Neil and Monte Wallace. One of the private buyers is late-night television comic David Letterman.

The descendants of Benjamin Harrison Cohan have not yet agreed to the sale of the farm. The Cohan descendants hold a legally binding covenant that restricts the sale of the farm until the year 2010 without their permission. The Wallaces signed the covenant when they bought the farm in 1969. The covenant is aimed at protecting the farm from development.

If the farm is sold, it is known that the new owners plan some luxury home development on the farm, although less development than the 32-lot plan. The plan is also believed to include some kind of conservation project with The Nature Conservancy, an international conservancy that is involved in land protection efforts throughout the world. On the Vineyard the conservancy has been heavily involved in sandplain grassland restoration projects, including a large restoration project at the Katama Air Park. The air park is adjacent to the Herring Creek Farm.

Meanwhile, at a public hearing on Tuesday night, the Edgartown planning board voted 4-1 to approve the 32-lot cluster subdivision plan for the farm.

"Realistically there has been a lot of work put into this project and there have been sacrifices everywhere," said Michael Donaroma, a member of the planning board who also voted in favor of the project as a member of the Martha's Vineyard Commission.

The MVC approved the subdivision plan three months ago.

Only one member of the planning board voiced objections to the plan on Tuesday night. Board member Alison Cannon urged her colleagues to reduce the density of the plan by eliminating two of the four houses planned for the shore of the Edgartown Great Pond.

"My concern is the habitat and the natural conditions. Once you've lost the land, you've lost it. We don't often get to make a choice to protect it, and what we have here is a valuable resource, which is that land and the pond as well," Mrs. Cannon said.

"If we eliminate two houses, we are basically denying the whole application," Mr. Donaroma said.

"I'm not sure that follows and I would just like to mitigate the impact," Mrs. Cannon returned.

"This has been going on for 10 years and it has changed a lot in scale. We have a lot of other areas where there will not be something on the pond," said planning board member Norman Rankow.

"With careful planning and the involvement of the conservation commission, these shoreside areas are not being ruined by having a house put on them," said planning board chairman Kenneth Southworth.

Planning board member Alan Wilson had no comment during the deliberations, but said only as he was about to vote: "I am a reluctant yes."

The 4-1 vote came at the conclusion of a three-hour session in the Edgartown town hall.

The hearing was held jointly with the town board of health. Health board members had a number of comments on the septic system for the development. Among other things, they urged the planning board to require the developer to have septic inspections done on the five existing houses on the property before the end of the summer. A number of other conditions were recommended, some aimed at strengthening the MVC conditions, including more monitoring of the agricultural use of the East Field on the property.

The planning board agreed to attach all the conditions to their approval.

Board of health member David Murphy warned the planning board that the combination of 32 large homes and farming the East Field will drive the property near and very possibly beyond the carrying capacity for nitrogen in the fragile Great Pond.

Mr. Murphy also raised pointed concerns about the plan to locate houses below the eight-foot contour and very near the pond. In that area the distance to the water table is only a few feet, and Mr. Murphy said any underground mechanical systems - such as septic systems - will be sitting in water for at least part of the year.

Planning consultants for the applicant proposed an aggressive planting scheme to screen any houses located near the pond; the scheme includes an expenditure of up to $100,000 per lot to plant trees and shrubs and install irrigation systems near the shore of the pond.

The planning board also will require the developer to pay up to $100,000 to completely restore the Crackatuxet sluiceway. Restoration of the sluiceway has been a sore point between the town and the Wallaces for many years, and on Tuesday night planning board member Norman Rankow grilled Mr. Johnson in tough language.

"Isn't it fair to say you haven't done a damn thing about it [the sluiceway] - isn't that an accurate statement?" Mr. Rankow said. He continued: "It's a vital, vital resource and it should not have been allowed to close up naturally, and you know it has gone fallow, it's a green ooze and you front on that and I can't understand why you let that happen."

Mr. Johnson withstood the tongue-lashing, and when it was all over he thanked the planning board.

"I appreciate your public service and all the work that has gone into this," he said.