Alliance has accused the DUP and Sinn Fein of a "sectarian carve up" over an £8m neighbourhood regeneration fund for Belfast.
Councillor Michael Long said his party opposed a new Shankill fund and criteria which he claimed would see East and South Belfast lose out on almost £650,000 of funding.
Alliance opposed the moves but they were approved at a meeting of City Hall's powerful strategic policy and resources committee meeting and are due to be ratified at tonight's council meeting.
"We are opposed to this latest attempt of a funding stitch up between Sinn Fein and the DUP," Mr Long said.
"They voted for the funding to be divided into five groups rather than on the four quarters of the city - north, south, east and west - which is the natural and traditional way of splitting Belfast.
"Instead the Shankill has been hived off into a separate funding stream which has only been done because unionists and republicans can't work together in west Belfast to provide fair funding for all.
"It is 2021 for goodness sake. It is well past time that funding on a sectarian basis was done away with and Alliance is utterly opposed to this. We instead proposed that the West stream could have a minimum threshold for the Shankill area to ensure it is treated fairly."
Mr Long claimed Sinn Fein and the DUP were proposing that funding wasn't based on population, but had introduced an "arbitrary 50% weighting mechanism" which would see south and east Belfast lose out on almost £650,000 funding.
"An Alliance proposal for a weighting system which would see fairer allocation across the city was defeated," he said.
"It would have addressed deprivation but ensured every part of the city got a fair opportunity. Unfortunately, the DUP voted to back a SF proposal which will see the east and south of the city lose out.
"This funding will be used as we recover from Covid-19, and it is important to remember that East Belfast has suffered the highest number of deaths and yet no weighting has been given to data such as this."
The neighbourhood regeneration fund replaces the local and Belfast investment funds which Alliance had raised concerns about with the Northern Ireland Audit Office.
Mr Long welcomed that his party's criticisms of the previous schemes had been addressed but added: "The days of carving up the city on a sectarian basis should surely be over and there should be fair funding for all with any weighting based on a range of factors and most importantly on the basis that the best schemes receive the funding."
DUP group leader in City Hall, Councillor George Dorrian, said: "The neighbourhood regeneration fund should be a good news story at a time when we are facing major challenges in our communities. This makes the Alliance Party's negativity all the more disappointing."
Sinn Fein group leader, Councillor Ciaran Beattie, said: "It beggars belief that the Alliance party would propose a formula to reduce funding into areas of deprivation and poverty. There can be no middle of the road when it comes to tackling deprivation."