Royal Sutton Coldfield's Town Council had unveiled proposals to offer free parking, via their own funding, for visitors during the evening and weekends.
But Birmingham City Council has blocked the scheme, saying they are 'committed towards a green recovery from Covid' and that they wish to encourage active travel.
Councillor Simon Ward, Leader of Royal Sutton Coldfield Town Council said: “We wanted to ensure that businesses are supported in the Town after an incredibly tough year.
"All we wanted to do was encourage footfall in the town centre and support our night-time economy.
"It is surprising and disappointing that Birmingham City Council have blocked a scheme that was designed to support our town centre and would have cost them nothing.”
Councillor Ewan Mackey, the Deputy Leader of the Conservatives on Birmingham City Council, added: "This comes at the same time that Birmingham City Council are ending the free car parking scheme for critical care workers across the city, who have sacrificed so much in this past year, forcing those who work in the City Centre to have to pay for parking as well as cough up £8 a day if their car is not new enough."
MP Andrew Mitchell MP added: "I am disappointed Birmingham City Council are not interested in a scheme that will not cost them a penny and will help our Town’s local economy after a difficult 12 months for retailers.”
A spokesperson for Birmingham City Council said: “Birmingham City Council has been clear in its commitment towards a green recovery from Covid, and has subsequently invested significantly in infrastructure and initiatives to encourage active travel and the use of public transport.
"Royal Sutton Coldfield Town Council’s request for free parking for visitors during weekends and weekdays after 4pm was given careful consideration, however it was concluded that the move would not support green recovery and could incentivise people to use their car when they may have previously considered low-carbon alternatives.”
Vesey councillor Rob Pocock (Labour) slammed the subsiding plan as "a ridiculous waste of taxpayers’ money."
He added: "It is an ill-thought-out proposal that smacks of the sort of ‘knee-jerk populism’ which totally unravels as soon as you look at it properly.
"For example, a lot of people park in the Town centre to commute by train into Birmingham.
"Giving them free parking won’t put a single penny into the Sutton economy. A lot of other people come to Sutton by bus or they walk.
"Are we trying to incentivise them to come by car instead?
“On top of that, there is absolutely no evidence whatsoever to suggest that the only thing stopping shoppers from spending money in Sutton is the costs of car parking.
"It’s the decimation of attractive retail and leisure in the centre that’s the biggest obstacle. If the Town Council has £100,000 to spare to support regeneration in Sutton – which is certainly needed – the best use is to provide business start-up and ‘bounce-back’ funds, supporting new high quality independents to locate here."