AMSTERDAM (Reuters) - The city council of Eindhoven, Netherlands, on Tuesday voted in favor of an initial agreement with computer chip equipment maker ASML to start planning a major expansion in the city's north.

In a 34-6 vote, the council said they would support a plan unveiled by ASML and the city government in April to develop new facilities large enough to support up to 20,000 new employees in a relatively undeveloped area in the north of Eindhoven near the city's airport.

ASML, Europe's largest technology company, needs additional space to grow along with the semiconductor industry, which is expected to double in the coming decade.

The company in January began threatening to shift major operations outside the Netherlands if it did not receive assurances it would be able to grow at home. That prompted the country's national and regional governments in March to pledge $2.7 billion to improve transport and housing in the Eindhoven region in a plan dubbed "Project Beethoven."

Opponents of the city's agreement, including representatives of the Socialist Party, said they had not been given enough time to consider the consequences of the expansion, and that residents should have a chance to vote on it in a referendum.

The Eindhoven Metropolitan Region is expected to grow from a population of 850,000 to more than 1 million in the coming decade as ASML and other tech industry firms expand.

Alderman Stijn Steenbakkers, one of the architects of the city plan, said retaining ASML was of importance for the Netherlands and Europe and it would change Eindhoven.

"It's fantastic that we...have pulled ourselves out of the slump of the 1990s and have the chance to be able to choose something like this," he said in a debate before the vote.

In the 1990s Philips laid off tens of thousands of workers in Eindhoven before moving its headquarters to Amsterdam.

(Reporting by Toby Sterling; Editing by Chizu Nomiyama)

By Toby Sterling