The official Newcastle City Council regeneration scheme, Going for Growth, involves knocking down 6000 homes and building 20 000 new houses in a series of urban villages.
But residents in the Scotswood area, the district to be affected most, are unhappy about the demolition of 2100 homes and will put forward their own regeneration scheme in December.
They say the council failed to consult properly about the plan and intend to seek advice from architects and urban designers with the intention of devising an alternative to the widescale demolition of housing.
Housing associations and housebuilders have already been consulted about the alternative scheme, a mixture of social and private housing with a number of community facilities, including schools.
A Scotswood resident, who did not want to be named, said: "The council says that housebuilders will not come into an area without large areas of land being available. But we have been told that this may not be the case and propose that only 400 homes need to be demolished."
The resident said that the local community felt Going For Growth lacked detail about the role of a new school in the area and did not address the question of long-term employment prospects.
"The council says it is consulting with residents at every stage of the process but it recently announced that no more council homes in the area will be let out. We feel the council thinks this is a fait accompli," he said.
A council spokesperson said public responses to the draft masterplan of Going for Growth would be considered before a revised masterplan was released.
He said: "Over the summer we held 100 public meetings and gathered 5000 responses on the draft masterplan. Some residents were unhappy with the scale of demolition proposed. All responses will be fully considered."
"Nothing about this process is set in stone and we will keep putting the plans out for consultation until all sides are happy," he added.
Public responses to the masterplan will be released on 7 November.