There is an agreement between the Department for Transport and West Yorkshire Combined Authority that the project to revamp key parts of the town centre should be completed by March 2024.
But revelations that one of Harrogate's leading property companies has submitted a proposed claim for a judicial review has cast uncertainty over the already-delayed project which is being led by North Yorkshire County Council.
Letters obtained through a Freedom of Information (FOI) request reveal claims from Hornbeam Park Developments that a council-run consultation on the proposals was "unlawful".
The council - which recently announced plans for another consultation this summer - responded in a letter to say it "does not accept" the claims.
A Department for Transport spokesman said it expects all projects funded through its Transforming Cities Fund to be delivered on time and that where there are delays, deadlines will be "reassessed by a panel on a case-by-case basis".
But when asked what a possible judicial review could mean for the Harrogate Gateway project, the spokesman added "we can’t comment on the specific funding arrangement" of the scheme "as this information is commercially sensitive".
Separately, the council also said in response to the FOI that it "does not hold this information".
Hornbeam Park Developments made the legal threat in February when it challenged the council's decision to submit a final business case for the project despite survey results showing more respondents felt ‘negative’ (56 per cent) about the scheme than those that felt ‘positive’ (39 per cent).
The council then announced plans for another consultation and said it hoped construction works would start this winter, with completion in winter 2023/24.
The works will involve cycling and walking upgrades for Station Square and the One Arch underpass, as well the Odeon cinema roundabout and several other streets in the area.
But the most controversial plans include a reduction of Station Parade to one-lane traffic and a part-time pedestrianisation of James Street.
There are similar Gateway projects for Selby and Skipton, yet Karl Battersby, director of business and environmental services at the council, said the Harrogate scheme "has generated the most interest by far".
He said: "It is positive that local residents and businesses feel so strongly about changes to their town and it is important to ensure that everyone has the opportunity to share their views on designs for the ambitious scheme.
"The project has developed since the previous consultation, and we know that the impact of the changes on traffic levels and flows were key issues raised in the previous consultation and we will provide further information on those aspects.
"We will also be consulting on the draft Traffic Regulation Orders, which would be required to implement the scheme.
"We will continue to work to the current timescales as set by the Department for Transport and West Yorkshire Combined Authority."
Mr Battersby also said details of the next consultation will be announced "shortly".
By Jacob Webster, Local Democracy Reporter