I am afraid I disagree. When you refer to a site that you own, is it a site that you bought on the open market or is it a site given (or cheaply sold) off spouses family land?
If the site was given by the family, my opinion is that (morally certainly, legally possibly) you would have to honour whatever agreement they had with the developer.
If it was sold cheap to you\your spouse, I would still say that you should honour the agreement.
If it was sold to ye at full value, but either of ye knew of the agreement with the developer before going ahead, I would still say that you should honour the agreement.
If ye paid full value for the site, and didn't know about this agreement when doing so, then morally and legally, you do not in my opinion have any obligation to honour the agreement. (though personally, I would still be inclined to do so, rather than alienate family)
I would not be overly worried about inability to get planning in the future, unless your site is extremely narrow. A surface water wayleave can be restricted to as little as 5 metres width and would still be quite adequate.
If the pipe involves deep excavation, the developer can do two things:
1. He can dig a fairly straight-walled trench and use trench supports (slightly dearer for him) OR
2. He can excavate a trench with sloping sides - if it is at 45 degrees, this means that a five metre deep trench will involve destroying 10 metre strip of lawn above and a lot more excavation in general (possibly making future building more expensive, if it is close to future building).
There would certainly be nothing wrong in you insisting on the use of option 1, and this does mean being physically on site and getting things straight with the diggerman day 1.