A Government report which claims the King Alfred development is not financially viable is "contradictory, inconsistent and highly debatable," according to council leaders.

The District Valuer's Office, part of the Inland Revenue, cast doubt over the £290 million Frank Gehry-designed scheme.

It warned the project could go as much as £29 million over budget and taxpayers would have to stump up a significant proportion of the £36 million cost of the leisure complex.

In a report to the council's policy and resources committee, chief executive Alan McCarthy said the District Valuer had been working with "benchmark" figures which were different from the actual project costs provided by leading surveyors and verified by the council's own consultants.

Referring to the District Valuer's view that costs could be reduced by up to ten per cent, Mr McCarthy added: "This seems to contradict his own categorical conclusions that the scheme is not viable."

District Valuer Charles Solomon also criticised the development because it did not include plans to improve amenities to cope with the influx of new residents, known as a Section 106 agreement.

Mr McCarthy said: "This ignores the fact the scheme will be designed by an internationally-acclaimed architectural team with input from sculptor Anthony Gormley.

"The sports centre itself will not only provide additional recreational facilities for residents, its facilities will be extensively used by schools."

He added: "The conclusions and recommendations within the District Valuer's Report are highly debatable.

"The District Valuer has strayed into planning judgements rather than confining himself to a financial assessment of the application."

Developer Karis said the figures on which report was based were inaccurate and that new "more robust" costings had been evaluated which showed the plan was viable.

Managing director Josh Aghiros said he was currently reviewing the design of the proposals in light of criticism from English Heritage and the Commission for Architecture and the Built Environment (Cabe).

He said: "We will shortly be making an announcement about any changes to the design."

Meanwhile, a Gehry proposal for a £1.9 million forest of skyscrapers in Brooklyn, New York, is generating controversy similar to that which has rocked the Hove project.

His new scheme has been panned by US writer and Brooklyn resident Jonathan Lethem, who described the plans as "ill-conceived", "out-of-scale" and "atrocious".