The drama followed a rally held by campaign group Protect Our Woodland! (POW!) against plans to build 875 new homes on fields and ancient woodland off Titnore Lane, West Durrington, Worthing.
Outline planning permission has already been granted by Worthing Borough Council for the scheme, which would see more than 200 trees being felled in the last remaining ancient woodland in the area.
A plea for the decision to be called in for a public enquiry was rejected by the office of deputy prime minister Prescott.
Angry locals gathered in numbers in Northbrook Park in Durrington to hear speeches by representatives of POW!, local amenity groups such as the Worthing Society, Sussex Wildlife Trust and a former county councillor.
Most of them then joined a procession down Titnore Lane itself, to show "John Prescott" the woods whose death warrant he appears to have signed.
In the heart of the woods the crowd came to a halt and gathered around the effigy, which was set on fire to cheers and chanting and the annoyance of queues of motorists.
Said a POW! spokesman: "We hope this sends a message to Worthing council and the government that local people are not going to sit back and watch property developers trample all over their countryside and their heritage.
"They have thwarted the democratic will by pushing ahead with this scheme and they are going to meet with spirited resistance every inch of the way."