There is confusion over who would be responsible if there was an accident on the proposed new cycle lane along Worthing seafront.
Worthing Borough Council is considering whether to start work on phase one of the controversial scheme, which would result in a lane costing £310,000 being marked out between Western Road, Lancing, and Splash Point.
But the plans have sparked an outcry from chalet tenants near Splash Point, who fear there will inevitably be collisions between cyclists and pedestrians.
The operators of Ju-Ju's cafe have also objected, saying there had already been a number of near-misses at a time when cyclists were supposed to be banned.
Several years ago, the borough council was forced to pay out more than £100,000 in damages when a daytripper from Surrey was hit by a cyclist and suffered brain damage.
The accident resulted in the cycle lane between the Lido and George V Avenue being scrapped.
According to the borough council, West Sussex County Council would be responsible for dealing with any claims on the highway in the event of an accident.
The borough's insurance and risk management officer had advised that Worthing would not be liable in the future.
But a spokesman for West Sussex said: "The responsibility would be the cyclist's or the pedestrian's, depending on whose fault it was."
If the accident was due to a fault in the lane itself, the borough council and the county council would share responsibility.
Councillor Tom Wye said: "This is a severe risk we're taking.
"If you're 80 years old and get knocked down and break your hip, you don't care who compensates. Your life is ruined."
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