However the council is adamant that all 78 acres must be developed in one go and has accused Landscape Estates of "cherry picking" the best site.
The developer has responded by handing its proposals to a planning inspector to decide whether it can start work. Failure to resolve the issue at this stage will lead to it being passed to the Office of the Deputy Prime Minister.
Project architect Bryan Green, masterplanner at GML Architects, rejected the claim that Landscape Estates was cherrypicking the best site.
He said: "We own the site. It's the only bit that can be developed in the next five years. To call it cherrypicking is totally erroneous: this is the only cherry on the plate.
"I can see no reason why this site needs to be held back until all the other sites are ready."
The row follows the fiasco at the Bath Spa project, which was due to open in October 2002 but was delayed by peeling paint on the walls of the pool.
Bath council last week agreed to pay contractor Mowlem in full for remedial works to the pool and to waive liquidated damages from August 2003, when the paint problems first appeared.