Grosvenor and Lend Lease face tough challenges to their massive Tithebarn retail scheme in Preston from neighbouring Blackburn and Blackpool councils.
The 1.5m sq ft project, anchored by a John Lewis department store, is too large and goes against regional planning policy, claim the two rival councils in formal submissions to Preston's draft supplementary planning guidance.
Cllr Maxine Callow, cabinet member for tourism and regeneration in Blackpool, said the council was not acting selfishly in raising its concerns, but wanted to ensure development in all Lancashire towns and cities was proportionate.
She said: "I'm all in favour of competition and firmly believe that when Debenhams opens in Blackpool next year confidence will be restored in the town and other big names will be attracted. But there is only so much money to go round and this Preston scheme does seem to be out of proportion. We're not just being selfish about this, we want the whole of Lancashire to prosper. If they Preston are going to go ahead with this scale of expansion someone is going to suffer. We do want investment in Lancashire but we feel this scheme is too much."
The Grosvenor scheme has already frustrated Preston businesses and residents with its lack of progress since it was first mooted five years ago.
The joint venture with Lend Lease and pre-let to John Lewis were announced last year and a planning application is due to be submitted in the summer.
Cllr Alan Cottam, Blackburn with Darwen council's executive member for regeneration, said: "The Council, along with Blackpool, have lodged an objection to the project on the grounds that the size of the development far exceeds the need of its population. We believe that Preston should work within its own boundaries and work for the needs of their own residents. They are developing beyond their population demands.
"We work within our own development framework and would like them to do the same. We are in an age of minimum carbon footprint – each area should serve the people who live and work in their area. They should not be encouraging unnecessary travelling to other areas."
Both councils claim that the Government's planning policy for the Central Lancashire City Region insists on an even approach to Blackpool, Preston, Blackburn and Burnley. They believe the Tithebarn proposals would elevate Preston unfairly and undermine the other towns.
No-one at Grosvenor was immediately available for comment.