Arrowcroft, who own the Albert Dock, want to block the plan

The latest scheme includes plans for a 9,000-seat arena, apartments and hotel and conference facilities.

But Arrowcroft, owners of adjacent Albert Dock, are threatening to go to court to block the project. They claim it does not include enough parking.

A project to build a new ground for Everton Football Club on the site was abandoned in 2003.

Jeopardising hopes

The club failed to raise enough cash to fund their share of the �155m project.

Council bosses want the area to be redeveloped in time for 2008, when the city will be European Capital of Culture.

Earlier plans for a "Fourth Grace" project near the site were dropped in July after costs rose more than �100m over budget.

An inquiry concluded that the plans were "flawed from the start".

'Over budget'

The Cloud building, designed by architect Will Alsop, would have stood next to the existing Three Graces, the Liver, the Cunard and the Port of Liverpool buildings.

The new development is a partnership between Liverpool City Council, Liverpool Vision, the Northwest Regional Development Agency, and English Partnerships.

On Tuesday a representative for Arrowcroft told the committee that the company is prepared to go to court to block the development, jeopardising hopes for 2008.

The potential challenge comes less than a week after Liverpool Vision said the scheme would not go the same way as the failed Fourth Grace scheme.

Leader of Liverpool City Council, Mike Storey, said: "This is a significant step for a highly exciting development on on one of the world's greatest waterfronts.

"We are on track to deliver these much-needed facilities in time for 2008."