An investigation has been launched over fears that a housing development could block the construction of an abandoned portion of the tram network.
Planning officials said they are looking into whether developers building a three-storey block of flats, which was granted planning permission in April, have broken rules protecting a corridor of land originally intended for trams.
Construction has already begun on the eight-flat mixed residential and retail development at the corner of Wester Coates and Balbirnie Place, in the west of the city .
The site sits at the bottom of the embankment which could be used to carry the tram line to Granton, if plans are ever revived. The existing brick retaining walls have been removed during construction work and replaced with metal sheet pile barriers.
Fears have now been raised that the work puts any future attempt to extend the tram line at risk, but the developer insisted it is abiding by planning guidelines and were issued with the necessary building permits.
Transport consultant Robert Drysdale warned that similar disputes could arise across the capital as developments encroach on land set aside for the truncated tramway.
He said: “The parliamentary powers to build the tram are still in force, so anything that was done that intruded into the maximum line of deviation for the tram route as authorised by parliament would have to be reversed if the act was ever implemented.
“It would seem strange that there could be any planning permission that breached that, but even if planning permission had been granted, it can’t undo the powers of the act. As the next two years pass, I suspect this sort of issue will crop up around the city.”
Councillor Robert Aldridge, transport spokesman for the Liberal Democrats, said the line had to be protected. He said: “The waterfront development is going to go ahead, albeit at a slower rate, so we’ve got to have the possibility of having good public transport infrastructure to ensure people living there can get to work in an environmentally friendly way.”
Phase 1B of the tram project, known as the Granton spur, was abandoned in 2009 when contingency funds earmarked for the £87m branch were used up early on in construction.
Trams were expected to branch northwards at a junction in Roseburn and run along the cycle path that follows a disused railway line as far as the shore at Granton.
The corridor of parkland, which runs over the road at Roseburn Terrance along a former rail bridge, remains in council hands, and is protected from development by a Scottish Parliament act that lasts until 2016.
Mike Towers, managing director of architects McLaren, Murdoch & Hamilton which is handling the project for developers 83S Ltd, insisted the firm was following planning guidelines and had never been told about any further conditions.
He said: “We are complying fully with all planning restrictions in place for the site. We have consulted with all the relevant city authorities, and have building warrants and permissions for the sheet piling that has been built, retaining the embankment as required.
“By adding lighting and re-grading the cycle path leading up the embankment, we are improving the public space as we have been requested to.”
A council spokeswoman said: “We are currently investigating this matter. In particular, we are seeking to establish if unauthorised work has been carried out on council-owned land.”