In an "damning" statement, Flamingo Land Chief Executive Gordon Gibb heavily criticised the authority's leader and said claims that work is continuing with the theme park operator "could not be further from the truth".
Cllr Steve Siddons claimed Scarborough Council "continues to work with Flamingo Land" in a meeting of the full council on Tuesday; the first substantial update on the site for more than a year.
However, Mr Gibb has now said: "Flamingo Land has not discussed our plans for the Futurist with Cllr Siddons since shortly after he became council leader a number of years ago."
The Ryedale-based theme park operator first revealed plans in January 2017 for ‘Flamingo Land Coast’ which included a four-storey building on Foreshore Road for attractions, restaurants, education facilities and children’s play areas.
An adjacent building would contain a winter garden and viewing area, and a 60-metre "cliffhanger tower" ride would be accessed from the roof.
This week Cllr Siddons reiterated that Flamingo Land is the preferred bidder for the site and that the coronavirus pandemic has caused delays to the planning process.
"One of the things that has happened on that site is that Covid has got in the way. I think it has probably created some delays in the ways things are progressing," he said.
Councillors heard that there has been interest in the top of the former Futurist site and that discussions are ongoing; referring to an area of raised, sloped land behind the former theatre site.
Cllr Siddons said that "these negotiations do take time" and that there was little else to report until a more formal proposal is submitted.
In a statement, Mr Gibb said: "Unlike the other council representatives that had shared Flamingo Land's dream to deliver a world-class entertainment facility to Scarborough, the new leader, Cllr Siddons, was not engaged, seemed dismissive and has never made contact with us since.
"Cllr Siddons' recent comments regarding the Scarborough Council's continuing work with Flamingo Land on proposals for the former Futurist site could not be further from the truth.
"I have spoken directly to the council and told them that we will not work with Scarborough Council on our development plans with the Council as it is currently structured.
"We do not believe they have the understanding, knowledge, energy or imagination to make this project happen.
"Reluctantly the company has withdrawn its interest in Scarborough as a direct consequence which is, on a personal level devastating as I was brought up in Scarborough and looked forward to bringing a world-class attraction to the town creating jobs, careers and prosperity for the area which would have undoubtedly followed."
The Scarborough News has approached Scarborough Council for a statement.