Councillor Jonathan Yardley said the £55 million project seemed to now be “dead in the water” after council chiefs revealed talks with Odeon had been put on hold.
Wolverhampton Council had come to a conditional agreement with the chain to build a Luxe cinema – but the talks are now not progressing as a result of Covid-19.
Now Councillor Yardley has raised concerns over pedestrianisation proposals – dubbed the Westside Link – in light of concerns over the future viability of the project.
Councillor Yardley said: “From what Richard Lawrence (Wolverhampton Council’s director of regeneration) said, I think all the talks with Odeon have ceased.
"So one only can conclude the whole of the Westside development is on the back burner and that would raise questions over it’s future viability.
“It could be dead in the water which is a real shame and we’re building that paved area down Victoria Street and Lichfield Street to lead all the foot traffic down to Westside and it seems Westside isn’t going ahead.
“That would be the road to nowhere and there’s a lot of questions from traders and St Peter’s Church about how they’re going to get access to their premises.
“The church has a lot of elderly people in the congregation – how will they get to the church?
"We could be making the situation worse for those people and traders and for the city centre as a whole.
“It’ll be a road to nowhere which will lead people to a vacant plot.”
But chiefs at Wolverhampton said they remain committed to ensuring the £55m complex off Salop Street in the city goes ahead as planned, despite the impact of the virus.
Councillor Stephen Simkins, cabinet member for city economy, said: "The Council is committed to the delivery of Westside despite the current Covid-19 challenges, which are not unique to Wolverhampton and are impacting towns and cities across the country.
"As with all of our major capital projects we will of course ensure it makes financial sense and is in the best interests of the people of Wolverhampton.
"Major regeneration is happening in the city centre at the railway station, i9 and the Civic Halls – and it is developments like this that will enable the city to bounce back from the Covid-19 pandemic and relight – delivering jobs and further investment.
"Increasing footfall is at the heart of our plans to reimagine our city centre and to do this we must better connect different areas of the city centre and create event spaces like the one planned in Victoria Street.
"With the support of central government funding, which we hope to secure in the coming months, we are confident of delivering our ambitious plans."