To make a French nudist blush might appear to be a mission impossible. Not at Cap d'Agde, on the Languedoc coast, home to "naked city", Europe's largest nudist holiday colony.

A long-simmering war between two tribes of the unclothed – "traditional" nudists and so-called "libertines" or exponents of free sex – exploded into a public protest at the town's council meeting this week.

Old-fashioned naturists have been complaining for years that Cap d'Agde's once-sedate nudist quarter has been disfigured by an influx of partner-swapping clubs and raunchy hotels. A flurry of arson attacks on sex clubs two years ago was blamed on low-level terrorism by nudist fundamentalists.

At this week's Cap d'Agde council meeting, the protests took a more peaceful form. Old-fashioned nudists complained that they, and their children, were being confronted with "voyeurist" and "exhibitionist" behaviour, including sexual acts in public. Worse, they suggested, the "deviant" newcomers sometimes walked about in their clothes and mocked the "real" nudists.

Florence Denestebe, an independent local councillor, said: "When the sun shines, there is an area of Cap d'Agde which turns into the European capital of free sex."

She asked the town's mayor, and MP, Gilles d'Ettore, to intervene before Cap d'Agde's "oversexed" image caused an "explosion of libertine behaviour in non-nudist areas" of the town.

About 30 traditional nudists (fully dressed) applauded her words from the public gallery. One said: "We bought a flat here 34 years ago because we wanted to live naked, to live with the sun. We wanted a natural life. Now, we are surrounded by wild animals."

Another protester said: "There are often more people walking around dressed than undressed... If you are just an ordinary nudist, they stare at you as if you were something bizarre."

The "Village Naturiste" at Cap d'Agde, established 40 years ago, attracts up to 40,000 tourists at one time. Sometimes called "Naked City", it has its own two kilometre-long beach, port and marina, fenced off from the rest of the town. The village has nudist camp sites, apartments, a hotel, shops, restaurants, bars, hairdressers and even a nudist post office and bank.

In the last decade, the village has been colonised by sex clubs and partner-swapping apartment complexes with names like Les Jardins d'Eden or Les Jardins du Babylon.

Deirdre Morrissey, a journalist who visited the resort for the Irish Independent last year, said rules had been relaxed to allow an invasion by the "libertine movement" for "commercial purposes". "Libertines believe in pure hedonism, including exhibitionism, as we discovered when we sampled the nightlife," she wrote.

"Over our après-dinner cappuccino, we were a little surprised to see a buffed-up guy dressed in a police uniform mincing around the seating area of the restaurant bothering the patrons. [He ended by] thrusting his naked bits at a pair of female diners, like some sort of bizarre, hedonistic digestif."

Mr d'Ettore said yesterday that he would consider the complaints but had already done all he could to keep the two tribes from each other's throats. By-laws had been passed to ban minors from the raunchier establishments. The protesters were not necessarily representative, he said. There had been no formal complaints this summer.