Uncertainty over plans for London Town's high-rise development in Hopton Street - dubbed the 'Tate Tower' - has led auditors to express "fundamental uncertainty over the group's ability to continue as a going concern".
The property company has been promised an extra £1m of funding this week by majority shareholder Horizon Charitable Trust.
The worries expressed by auditors in the firm's latest accounts casts doubt on the future of half-finished million-pound flats in Notting Hill and Brighton in which it has stakes.
Shares in London Town dived 60 per cent on Friday to an all-time low of 43.5p.
The firm's failure last October to win planning permission to transform the former paper merchant's site next to Tate Modern into 20-storey tower block led to a £3m pre-tax loss for the year to December. It made a £2.25m profit in 2001.
London Town is accounting for its interest in Bankside at cost as if it had permission. An appeal is due in May. John Dodsworth, finance director, said the directors were unable to quantify provisions against losing the appeal but they believed the company would continue as a going concern.