Lambeth Council has accused the City of Westminster of squandering taxpayers' money on a legal fight to block a proposed development next to Waterloo Station.
The scheme is opposed by Westminster City Council and English Heritage who claim that the new 29-storey tower will damage views of the Palace of Westminster from Parliament Square.
The controversy over Elizabeth House has been discussed as far away as Cambodia with the recent meeting of the World Heritage Committee receiving a highly critical report on the proposed scheme.
Although communities secretary Eric Pickles declined to order a public inquiry into the scheme, Westminster City Council has continued to pursue legal challenges.
Now Lambeth's cabinet member for regeneration Cllr Pete Robbins has written to Westminster's deputy leader Cllr Robert Davis urging him to give up the fight.
"Despite failing with every challenge made, you have pressed for a further court hearing in an attempt to overturn a decision taken in full accordance with national, local and London-wide planning policy," wrote Cllr Robbins.
"Given that it is clear that Lambeth Council, the Mayor of London and the secretary of state all considered the full range of issues in making their respective decisions, including the impact on views from Parliament Square, it is difficult to understand why Westminster City Council is yet again going out on a limb and wasting money of council tax payers in both Lambeth and Westminster with a potential legal bill of many tens of thousands of pounds.
"Given the fragile state of the economy I am staggered at your determination to choke off the prospect of economic growth, new jobs and much needed new homes that Elizabeth House will deliver.
"Elizabeth House is part of the ambitious and creative regeneration plan that will create new jobs and homes benefiting London and the country. Local businesses will benefit during and after the construction work and there will be better links to the South Bank from Waterloo which means that areas like Lower Marsh will be connected properly to economic and cultural activity."
Westminster City Council has yet to write a formal response to Cllr Robbins but Cllr Robert Davis said: "We would not challenge the Government unless we thought this was a major issue.
"We have to act now or face losing the unique vista of one of Britain's most important historical sites which is photographed by millions of visitors every year.
"UNESCO may put the area around Parliament Square on its endangered list – the Government need to rethink before it is too late, and we need to have an open debate in public on this issue."