Critics of Cornwall's Objective-one project claim that the county is failing to make the most of the £330m of European funding.
Critics say Objective One cash is spent on short term projects
They say there is little evidence of long term wealth being created.
Business leaders insist Cornwall's economy is being transformed by hundreds of new jobs.
But Peter Gripaios, professor of applied economics at Plymouth University, says there are not enough strategic developments.
He said: "I think there's an awful lot of stuff which is very short term or training and a lot of stuff which arguably should have been done by other government agencies.
"I think a lot of it has not been used as well as possible."
His comments came amid a growing debate over the future of Objective One in Cornwall.
The government has confirmed that it plans to take over the distribution of European grants from next year.
It has prompted fears that Cornwall will not receive a second allocation of Objective One funds.
Business and political leaders claim that the millions spent so far are transforming the county's fortunes.
Successes include the combined university at Penryn and the dualling of the railway line near St Austell.
Tim Jones, from the Devon and Cornwall Business Council, said: "Hundreds of jobs are being created.
"Most of them are in the small business sector, but that is what we need to do.
"We can't rely on huge corporate organisations to employ vast numbers of people.
"We need to create new sectors in the Cornwall economy and that's what's been happening."
More than 600 projects have been backed by Objective One with £230m committed.
Objective One status was won after Cornwall proved it was one of the poorest areas in Europe.