The inventor Sir James Dyson has threatened to scrap his £50m plan to build an engineering school of excellence in Bath over "bureaucratic" delays to the project.
Ministers this week ordered a planning inquiry into the Dyson School of Design Innovation amid concerns about flooding and the impact of a modern building on the historic spa city, a World Heritage Site.
The James Dyson Foundation (JDF), which would fund the school with £12m of the inventor's fortune, condemned the decision by the local government minister Baroness Andrews to "call in" the planning application and hold an inquiry.
"The inquiry is a scandalous waste of time and money. The Secretary of State already has enough facts to reach a decision," the JDF said.
"The scheme is well supported with the notable exception of the Environment Agency, which despite our attempts, has refused face-to-face discussions. As a charity we've already spent £3.5m and four years on the project, overcoming endless bureaucratic hurdles."
The organisation, of which Mr Dyson is a trustee, went on: "The trustees will now consider whether to direct funds towards further legal costs or move on to new projects." Bath and North East Somerset Council is in favour of the four-year-old project but the Environment Agency believes the site could be flooded.
The 10,888 sq m School of Design Innovation would require the demolition of a 19th-century building beside the Avon. Councillors approved the scheme against the advice of a planning officer.
Sir James insists that studies have proved the building would be safe and has poured invective on what he says is the Environment Agency's repeated refusal to discuss its objections with him.
Announcing Lady Andrews' decision, the Government Office of the South West said: "Her policy is to be very selective about calling in planning applications. Having regard to this policy, the Secretary of State is of the opinion that the application is one that she ought to decide herself because she considers that the proposals may conflict with national policies on important matters."