The new shopping centre would include shops and a restaurant
Work on a new shopping centre to replace an "eyesore" precinct could be delayed until 2011, warn developers.
They have been "frustrated" at the "obstacles" in trying to negotiate moving 17 HM Revenue and Customs staff from an office on the Pontypridd site.
Developers had hoped to start work within months on a new retail complex, with a restaurant and river terrace, in place of the old Taff Vale centre.
HMRC said it stood by its announcement to vacate the site by spring 2011.
Taff Vale Ltd said HM Revenue and Customs was refusing to discuss its lease.
The 1960s-built Taff Vale shopping precinct has long been considered an eyesore by many residents and its redevelopment is considered an important part of rejuvenating the town.
The shopping centre plan was given planning approval last autumn
The original Riverside plan, which included apartments and offices, was scrapped in January last year due to the economic climate.
A scaled-down version was put forward and given planning approval in the autumn.
The developer Taff Vale Ltd is negotiating with existing tenants on the site to free up land for work to begin in a few months.
However, the developer said HMRC, which rents office space on the site, had failed to respond to requests to discuss its lease, which does not run out until February 2011.
Taff Vale Ltd said in a statement: "A number of existing tenants have already relocated by mutual agreement and others have agreed terms to move in order to free the site for early demolition and to keep to the project timetable for a start later this year.
"However there is one main obstacle in the form of the Inland Revenue who have not responded in any way to requests for dialogue to vacate the tax office building."
The developer said it had made "repeated enquiries" with HMRC's agents about discussing a possible early release from the lease.
"It is very disappointing that with the other aspects of the development moving ahead so well, that HMRC continue to frustrate the developer which threatens the desired project timescales and further delays the regeneration of the town," it said.
The statement added that HMRC was continuing to pay a six-figure rent while using only 10% of the building.
"In an age where the public purse is severely stretched, it is entirely incongruous behaviour from a public body to ignore the possibility of an early release from their substantial liabilities as well assisting them to relocate the remaining small number of staff left in the building," said Taff Vale Ltd.
An HMRC spokesperson said: "HMRC has already announced that it would be vacating Taff Vale House by the spring of 2011, and this still stands. Any further discussion around future redevelopment plans would be a matter for our landlord.
"Our decision to vacate Taff Vale House follows a review of our estate across the UK. This review allowed us to free up space that was no longer required and have the right people in the right place.
Taff Vale precinct will be demolished along with an office block
"This review has already generated annual savings of £64m; we will save an estimated £230m in running costs by 2011/12.
"In the meantime, we are committed to retaining an enquiry centre in Pontypridd, at or near its current location, so that customers who prefer to deal with us face-to-face can still do so."
Attracting retailers to the new development has proved difficult but Taff Vale Ltd said progress was being made.
"This has not been easy with the combined effects of the recession and seasonal trade restricting potential new retailers' ability to concentrate on new store openings," said the developer.
"However a number of well known and respected retailers are now showing serious interest in taking the new units around the prospective anchor store which is moving closer to final agreement.
"The developer is in various stages of negotiation with national retailers and is confident that the remaining units will be let during the next six months enabling this part of the project to be ready for a mid-year start."