At a meeting of Rother's full council on Monday night (March 2), Lib Dem leader Sue Prochak proposed the 3.6m Next Wave scheme should be shelved in favour of restoring The Colonnade.
Cllr Prochak said: "We are all ageed that something needs to be done to upgrade the seafront.
"But people are totally concerned by this scheme."
She told the meeting a survey showed 73 per cent of people questioned were worried by the cost of Next Wave and 'were not convinced about it'.
Instead, Cllr Prochak asked the chamber to consider putting The Colonnade first, concentrating exclusively on its development and using any leftover cash for other projects.
The Next Wave scheme has been given a 1m grant by the CABE and English Heritage Shifting Sands initiative, and ties in with the recent relaunch of the De La Warr Pavilion. Rother District Council has already invested 600,000 in the idea, with the rest of the capital coming from the council's own coffers.
The project includes plans to pave over part of the putting green as a public right of way and to host the Pavilion's outdoor events, modern seafront benches and shelters, a new home for Bexhill Rowing Club and restoration and development of The Colonnade.
Leader of Rother District Council Carl Maynard said the CABE grant needed to be spent within 18 months and insisted work on The Colonnade had not been withdrawn from the council's agenda.
He also pointed out that Cllr Prochak's proposal, if accepted, could mean Rother having to give back the 1m.
He was backed by Conservative member Cllr Tony Ganly, who said: "Let's not look a gift horse in the mouth."
And fellow Tory Cllr Martin Mooney said: "We want to see Bexhill as the engine of the district.
"For heaven's sake, wake up. This is the 21st century."
Cllr Prochak's proposal was rejected by 30 votes to six.