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.

Lightwater Valley reveals reopening date
Harrogate teachers brave blizzard conditions in latest running challenge
Conservative councillors take swipes at Reform amid budget talks
Date revealed for Knaresborough Tractor Run
Yorkshire Air Ambulance appoints new CEO
Council to increase council tax by maximum after £43m "wallop" from government
Harrogate dad takes on 40,000-mile yacht race for bereavement charity
Harrogate BID backs return of town's popular Restaurant Week
Cost of Harrogate garden bin licence revealed
Spirit of Harrogate to enter administration
Call for council to support pubs and hospitality businesses
Ripon MP says Kex Gill realignment scheme is making 'good progress'
Northern Powergrid issue update on Leeds Road traffic lights
Sir Stephen Fry sends mental health message to Harrogate College students
Harrogate Cat Rescue appeals for urgent support as vet bills soar
Cuts may be needed to balance budget at North Yorkshire Police
Harrogate BID unveils full programme for town's Self Care Week
Pateley hit-and-run: Man charged with two further offences
Opinions sought on new specialist autism school in Harrogate
Harrogate MP sparks Parliamentary debate on water bosses flouting bonus ban


