I need to fit in additional data into a database, and I have a choice between modifying an existing table (table_existing) or creating new tables.
This is how table_
I would agree with DVK that if you opt for (B) you will end up having to query against several tables to get all of your original Field1 values, let alone complexity of JOINs etc. This wouldnt make sense unless the split into separate tables also corresponded to separation into different entities.
I agree with Paul in that your question can't really be answered without knowing the details of the entities involved and the sorts of queries and updates you will be running.