The scheme is set to be a focal point of the £300 million Caltongate development, which is looking to transform a vast swathe of the city's Old Town.
Speaking to the Edinburgh Evening News Dawe said: 'I'm not anti-development at all. However, I do believe that any development should respect the heritage of the city. Fraser is a well-respected architect - but these images are just grotesque and hideous.'
Fraser responded: 'This is a gap site, currently used as a car park, created by Victorian demolition. Our proposals demolish nothing - instead they recover the vigour, density and connectivity of the medieval plan, making buildings that reflect the scale and confidence of the medieval fabric the Victorians wiped out.'
He added: 'Crucially they recover the historic Leith Wynd, once the main route north from the Old Town but blocked by the Victorians.
'We will line it with shops, bars, restaurants and office entrances in a characteristic Edinburgh vertical-layering, and we will top it with a generous public square which hangs out over the Waverley Valley and offers the public wonderful views - a contemporary contribution to Edinburgh's stock of fantastic high places.'