Plans to build a new supermarket and a bowling club in Newtown, Powys, could be scuppered by a 30-year-old by-law, claims a town civic society.
The supermarket plans have been submitted to the council
There are proposals to build a store on Newtown Bowling Club and relocate the clubhouse and greens in a nearby park.
But the civic society claims a by-law prevents building in the park, and it would take a ruling by the Welsh Assembly Government to overturn it.
The developers said the plan met the aims of the unitary development plan.
Civic society president David Pugh said the by-law was passed by the old Montgomeryshire District Council in 1978.
Mr Pugh added: "We approached Powys Council to see if we could register the park as a village green, and this could have halted the development.
"But the council discovered that the park was covered by a by-law, passed by Montgomeryshire District Council under the Public Health Act of 1875, making it public pleasure grounds."
Mr Pugh said the land could not be built on unless the by-law was overturned by the Welsh Assembly Government, and this was confirmed by Powys Council.
He said Powys Council would have to prove that the land was no longer used and that the local community was happy for the development to proceed.
J Ross Developments said its proposal was "wholly in accordance with the aims and objectives of Powys Council's draft unitary development plan".
A spokeswoman added: "The bowling club site is a town centre site.
"For this and other reasons it is acknowledged to be the ideal location for the town's new foodstore as it will reinforce the future vitality of Newtown."
The park, owned by the council, is behind its offices in the town.