For years pupils at Park Community School have cut through Prospect Place to Park Lane.
Within the past month, six-foot high gates with sharp spikes have been erected by residents of Prospect Place who want to stop children using the thoroughfare.
Some local people who support the gates have complained that people walking past their homes are noisy, drop litter and vandalise their property.
Children are still using the shortcut but are now climbing over the fence, leading to fears about injury.
One resident of Prospect Place, who wished to remain nameless and was involved in meetings at which it was decided to erect the gates, said: "There have been a lot of problems here with litter, graffiti and vandalism — some people have had their windows smashed and their garages broken into.
"There is a lack of respect shown here and the residents are just trying to protect their properties."
Martin Thompson, manager of respite care home The Forget-Me-Not project in Prospect Place, said: "A small number of children are destructive and I do think the gates are a good idea in theory.
"We have seen kids urinating in the alleyway and hurling verbal abuse at each other which isn't very nice.
"However, the gates do seem to be causing problems and kids are using our window sills as a foothold to climb over it which is very dangerous."
Stacey Smith of Prospect Cottages said life had been better since the gates were put up.
She said: "It used to be so noisy down here with the kids shouting and cars driving through. Now it's peaceful — I'm all for it."
But children from Park Community School think the gates should be taken down.
Michael Winter, 16, said: "I used to walk that way all the time but now I have to take a much longer route which has made me late for school a few times. If they are complaining about litter why don't they put some bins up there?"
Fellow student Alex Winter, also 16, added: "People are still climbing over. There's going to be an accident soon."
John Patt's Quality Fruit Shop on Newport Road has seen a drop in business since the gates were installed.
Shop supervisor Jenny Beckett said: "There's not as many kids coming past the shop now and we've definitely lost trade.
"It's not just children who use that lane, it's convenient for elderly shoppers and dog walkers too. I want to see the gates gone."
Barnstaple district councillor Chris Haywood (Lib Dem) has vowed to take the case up with the public rights of way committee in Exeter on Monday, November 9.
Cllr Haywood said: "I've had lots of complaints from residents in the area and I think that people have a right to object. The diversion children have to take is much longer and runs past two very busy roads.
"Anyone who would like to fill out a form to register their objections can get one from me."
Park Community School headteacher David Atton said: "I understand why the residents have installed the gates but I have serious concerns about its design.
"The top is extremely sharp and I am concerned that before long there will be a serious accident when a child tries to climb over it — who would be liable for this?
"I also think that closing the lane will just displace the problems elsewhere and force our pupils to walk near a very busy road in the mornings and afternoons."
The Journal was unable to speak to the man who was believed to have installed the gates.
● You can phone Cllr Haywood on 01271 375121.