Aberdeen Exhibition and Conference Centre could be forced to write off millions of pounds of work done towards delivering a major new hotel.
The debt-ridden AECC venue wants the development to underpin its future.
Papers seen by BBC Scotland urge city councillors to reject the proposed operational and financial structure of the hotel.
A senior council official has said the authority would be left financially exposed by the current plans.
The AECC has been bailed out by Aberdeen city council several times in recent years.
The centre brings in an estimated £70m annually for the local economy, and is seen as vital to Aberdeen's status as an energy capital and host of Offshore Europe.
The matter will be discussed in private at a meeting of the full council on Wednesday.
The council said it did not comment on confidential reports.
An AECC spokesman said: "The AECC is having a positive trading year and has been living within its budgets. The centre is not currently increasing its debt and continues to contribute positively to the local economy."