A Sydney council has received "damning" legal advice suggesting there's a fundamental flaw in the state government's plan to demolish Allianz Stadium.
Waverley Council has received independent legal advice that the government botched the approval process when it decided to demolish Allianz and build a new stadium in its place at Moore Park.
AAP understands the advice suggests the planning minister didn't form the opinion that the new stadium would exhibit "design excellence" as required under the Sydney Local Environmental Plan.
Waverley Mayor John Wakefield says Liberal members on the council are now attempting to prevent the council from taking the government to court over the matter.
"They are stymieing the process," the Labor mayor told AAP on Wednesday.
"What they're trying to do is get us to the point where the demolition occurs."
The council's legal advice states there was a "jurisdictional requirement" for Planning Minister Anthony Roberts to satisfy the Sydney LEP.
It supports legal advice provided to the NSW Labor opposition in 2018.
Waverley Council on Monday night resolved to write to Mr Roberts informing him of the potential flaw in the government's approval process.
The minister would be given a week to respond before Waverley contacted other local governments to co-join a legal challenge against the state government, Mr Wakefield said.
But three Liberal councillors - who the mayor believes were briefed by the planning minister - moved a rescission motion delaying the letter.
"There is no doubt they were briefed by the minister's office ... it's a tactic to delay the process," Mr Wakefield said. "We're running out of time."
AAP understands demolition works are scheduled to begin in late January or February.
Mr Wakefield believes the potential error by the planning minister occurred because the government was rushing the process to have the stadium demolished as soon as possible.
"His (Mr Roberts') moral code and his behaviour is his business, I don't claim that there has been anything particularly suspicious, other than his rush," the mayor said.
"I have not at any point said the minister is complicit or malicious in his behaviour. It's an error."
The Berejiklian government plans to rebuild the stadium at Moore Park at a cost of more than $730 million.
An upgrade to ANZ Stadium at Olympic Park and a new stadium in Parramatta will take the government's total spend to almost $2 billion.
Liberal councillor Leon Goltsman, who backed the rescission motion, said the legal action was "just a political ploy" by Labor councillors to help Opposition Leader Michael Daley.
Mr Roberts has been contacted for comment.