Public health is important, and public authorities are right to be concerned about toilet systems - it's part of their job. Generally if you are planning anything unusual you should let them know, and indeed, seek their advice. The relevant agencies - the Planning Dept of the Local Authority, the Building Regulations Officer, the Environmental Health officer and the Environment Agency (or SEPA in Scotland) might or might not be familiar with what you are proposing, but it best to explain everything as fully and openly as you can. Usually they are sympathetic and helpful. They cannot stop you using an unusual system if it does not cause a nuisance, threaten public health or damage the environment, but in some cases they can insist that a conventional system be installed, even if you choose not to use it!
It is certainly important to site toilets as far as possible away from water supplies to avoid contamination. Exact distances necessary depend upon the type of soil. Fissures in the bedrock can allow effluent to travel a long way and sewage and water should be at least 15m apart. If the soil is sandy this could be reduced to 7.5m. Where possible toilets should be downhill of wells or boreholes. The bottom of the latrine chamber should be 1.5m above the water table.
Through our consultancy service we offer detailed advice on the design of composting toilet systems, including the features that would be needed to get a system passed by the Environment Agency and Local Authority. It is likely that these authorities would need to see a report from a sanitation consultant for a system they are unfamiliar with.