One of the most controversial planning applications in Brighton and Hove's history will be determined this week, with potentially huge implications for the city's economy.

Developer Karis/ING's proposals for a £290 million, Frank Gehry-designed leisure centre and housing scheme at the King Alfred site in Hove have split public opinion.

The project, which was subject to 86 conditions, faces Brighton and Hove City Council's planning committee on Friday. The vote looks to be finely poised. Even the business community has failed to present a united front.

Outwardly the majority has been in favour but a vote at Brighton and Hove Chamber of Commerce's annual meeting last week rejected the scheme.

Planning officers have recommended councillors approve the application.

Proponents say the development will provide 750 new homes, including 280 classed as affordable, hundreds of jobs and £80 million worth of community benefits. They also say turning down an architect of Gehry's stature would send out the wrong signals about the city's ambitions and could scupper future developments.

Opponents say there is inadequate infrastructure to support the number of homes proposed. They say it is too expensive, out of scale with surroundings and they accuse supporters of being blinded by the prestige of having England's first Gehry-designed building.

Tony Mernagh, executive director of the Brighton and Hove Economic Partnership, says developers will stay away from the city if the Karis/ING application, which has cost £8 million to prepare, is rejected by councillors on Friday.

In an article for The Argus he wrote: "It will guarantee no serious investment will come near Brighton and Hove for another 15 to 20 years and we will suffer an entire lost generation in terms of the city's progress towards sustainable prosperity."

However architect Nick Lomax, who helped design the award-winning Jubilee Library, said: "Gehry might be one of the most famous architects in the world but the proposed development is far too dense for that site.

But with the brief he was given, even the best architects would be doomed to fail. I am afraid we just need to start from scratch."

In January Mr Lomax gave his backing to a consortium, led by millionaire entrepreneur Mike Holland, proposing an alternative scheme including 450 new homes and an Olympic sized swimming pool.