Impact Scotland secured planning permission in April for the 1,000 capacity venue to be built behind the RBS building at St Andrew Square.

A flagship cultural project of the City Region Deal, the Dundas Centre would have been Edinburgh’s first purpose-built music and performance venue for over 100 years. The facility had been earmarked to become the new home of the Scottish Chamber Orchestra.

However, a judicial review against the project was brought by the developers of the nearby St James Centre who raised concerns that the City of Edinburgh Council had breached rules to protect the World Heritage Site and a strict skyline policy for the city centre in approving the project.

Fearing that the legal battle could take years, Impact Scotland is now believed to be seeking out alternative locations for the venue.

A spokeswoman for Impact Scotland said: “We very much hope that a way forward can be reached to allow us to start construction of the Dunard Centre.

“We are facing a difficult, indeterminate delay to the project following the neighbouring St James’ shopping and hotel centre developers petitioning the courts for a judicial review of the council’s planning processes - this has led us to temporarily pause work on the project.

“It makes sense during this period that we consider all options available to us as our overriding goal is to find a way forward to begin construction of the Dunard Centre and create Edinburgh’s first purpose-built performance venue in over 100 years.”

The council has asked for mediation in an effort to settle the legal challenge, but said it cannot comment on ongoing legal proceedings.