Leaders of two combined authorities have been urged not to release funding to allow work to start on the £14.3m Harrogate Station Gateway scheme.
Campaign group Get Away says its legal advisers have written to West Yorkshire Combined Authority (WYCA) and York and North Yorkshire Combined Authority (YNYCA) asking them not to hand over the money while legal challenges are ongoing.
The group is calling on WYCA bosses to agree not to release millions of pounds from the Department for Transport’s Transforming Cities Fund when they meet on Thursday.
It is also pressing YNYCA not to proceed with its £2m contribution to the scheme.
The project includes work on pedestrian and cycling links near the transport hub, as well as improvements to public areas.
But Get Away, which was formed by several Harrogate businesses, says the work is neither wanted nor needed.
The group has been given permission to challenge an earlier High Court ruling allowing four traffic regulation orders (TROs), made by the council as part of the scheme, at the Court of Appeal.
It said it planned further challenges of more recent TROs made by the council.
Steven Baines, Get Away spokesperson, said the letters to the combined authorities set out the group’s concerns about the scheme, which include claims it would harm local businesses, lead to congestion, and increase greenhouse gas emissions.
He added:
“No responsible funding body should sign off millions of pounds of public money for a scheme that its own promoter accepts is high risk and low value, and which is facing a Court of Appeal challenge with real prospects of success.
“WYCA and YNYCA must not give North Yorkshire Council the monies to start works in the New Year while the courts have yet to decide whether the underlying traffic regulation orders are lawful.”
North Yorkshire Council declined to comment.
Senior North Yorkshire councillors have previously been critical of the challenge to the scheme, which they say has the support of Harrogate’s elected members and which represents a major investment in Harrogate town centre.
The Local Democracy Reporting Service has contacted WYCA and YNYCA for comment.

Otley Road set for six weeks of roadworks in New Year
Harrogate furniture poverty charity celebrates 30th anniversary
Santa's sleigh returns to Knaresborough streets as part of annual campaign
Opening date revealed for new pizzeria in Knaresborough
Black Sheep Brewery addresses administration rumours
Ripon woman wanted on recall to prison
Mental elf fun run raises £6,500 for Mind in Harrogate
Councillor still hopeful Nidderdale Greenway route can be extended
Pateley teen wins engineering award after creating unique gritter attachment
Knaresborough unveils first wave of public toilet upgrades
Housebuilder hands over allotments to Harrogate parish council
Ripon MP praises 'tremendous progress' of £82.5million Kex Gill project
Kirkby Overblow primary praised for 'love and joy' in glowing SIAMS report
Ripon mayor wont resign despite parish poll
'Best day on record': Harrogate café goes out with a bang on last day of trading
Police appeal for missing man could be in Harrogate
Harrogate and Knaresborough to feature in new North Yorkshire calendars
Knaresborough Christmas Tree Festival to return this week
Police video highlights dangers of drink and drug driving at Christmas
Teenager's cancer awareness film nominated for major award


