Opposition councillors rounded on the project at a council meeting last week, raising concerns that it could become a 'financial burden' and that the money would be better spent elsewhere.
In response, those present defended the scheme - known locally as the Golden Banana - saying that independent businesses in the town centre would not survive if regeneration did not take place.
The move to hold a public referendum was then narrowly defeated by 23 votes to 29.
The scheme has also attracted criticism from local MP Bob Russell. Russell has claimed that the proposed art gallery is not sustainable, highlighting that it will require substantial funding from the public purse every year and, bizarrely, that it was not protected against earthquakes ( see article here).
But a spokesperson for Firstsite, the organisation that will run the facility when it is complete, said: 'Local support is vital for the success of the project and, since 1994, we have talked with thousands of Colchester residents about what they want from the project.'