They were published in the last week without any fanfare, but a series of documents has exposed a war between Edinburgh City Council and the house-building industry with the potential to derail a bid to bring investment worth billions of pounds to the capital.

Edinburgh has been wrangling with its local development plan (LDP) for years now, and a controversial second version – described last year by the then SNP group leader Sandy Howat as “mince” before he helped vote it through – is in the final stages of a Scottish Government consultation, a process which could still bumble on until autumn.

In the absence of an agreed framework for the city’s development, major projects are now being approved by Government reporters almost on the nod, but against this background is the bid to land the Edinburgh City Region Deal to secure £1billion of government funding and unlock a potential further £3bn of private investment.

Talks are now underway with the UK Treasury and urgent discussions are still taking place between the six councils, business organisations and key companies to get a cohesive plan to boost the economy of south-east Scotland agreed by summer.

On the face of it the LDP and City Deal are separate processes, but one of the biggest bids for infrastructure investment in Edinburgh’s history has to be prepared in the next three months without knowing where houses can go, where schools are needed, where new businesses can be based or where roads and railways can be laid.

The City Deal won’t fund local education – Edinburgh needs an extra £12 million a year for new schools – but it can finance other projects and free up alternative sources like the Scottish Government’s new £50m infrastructure fund.

Growth is needed yet, as highlighted here last week, Edinburgh planners now insist there is no problem with housing supply and are using an unrealistic interpretation of new Scottish Government guidelines to block plans they don’t like.

So to the new documents, which were submitted to the Edinburgh LDP inquiry team and published on their website this week before the public consultation ends tomorrow. The planners are sticking to their guns and in the past fortnight re-stated the belief there is enough land in the draft LDP earmarked for housing to meet the city’s needs. They say 16,000 affordable homes can be built in partnership with social landlords on available sites, most of which will be reclaimed industrial land at Granton, even though transport is a problem which the abandoned tram line (funded by commercial developers, not housing associations) was supposed to solve.

But the housebuilders’ trade association, Homes for Scotland, is scathing in its assessment of the council’s projections, describing them as “wildly different” to earlier calculations which “took a more reasoned and informed view”. The planners’ analysis, says Homes for Scotland, “over-inflates forecasts of housing delivery, presents an unrealistic and incorrect calculation of the five-year housing land supply, and will prevent other sites from coming forward.”

A separate submission from property consultants Wallace Land Investment and Geddes Consulting, identifies a total requirement of at least 28,000 new homes in the next ten years, but already predicts a shortfall of 7,500 in the next three years alone. They estimate some 14,000 homes need to be built on land not currently earmarked for housing but, significantly and strangely, they say their analysis has not been challenged by the council.

So where does the truth lie? The Edinburgh authorities seem to be setting their faces against the housebuilding industry by denying there is a supply problem while apparently accepting numbers which prove the opposite. It’s a shambolic situation in which the solution appears to be the council letting the Scottish Government decide on a case-by-case basis.

But even if the LDP is signed off, it won’t solve the problems created by a politicised planning department at odds with the economic aims which underpin the City Deal bid. Someone, and at the moment it can only be council chief executive Andrew Kerr, needs to bash heads together.

Why should all this matter outside Edinburgh? Well with North Sea tax revenue the lowest for 40 years, unemployment shooting up 20,000 in three months to 6.2 per cent, and growth forecasts cut for the next 18 months the Scottish economy is, according to Scottish Chambers of Commerce chief executive Liz Cameron, on a knife-edge.

So Scotland needs its capital to be firing on all cylinders and the City Deal is the kind of initiative which could spark the ignition. But with Edinburgh’s forward planning in disarray it is, as Jeremy Corbyn might say, like a rocket booster without a wheel.