Stormont plans to claw back some of the £490m overspend by the controversial Renewable Heat Incentive (RHI) scheme are flawed, according to the body that represents 100 renewable heating businesses.
Northern Ireland politicians are today scheduled to debate proposals to recoup the massive costs associated with the RHI scheme.
However, the Renewable Heat Association (RHA) for Northern Ireland has branded them "discriminatory" and said they will adversely affect future inward investment to Northern Ireland.
The organisation also said costly legal action is likely if the legislation is approved by MLAs.
It is the latest twist in the controversy which has seen the Deputy First Minister resign, plunging Northern Ireland into a fresh political crisis.
Economy Minister Simon Hamilton has produced amending legislation which would reduce tariffs paid to about 1,800 people who got into the scheme before November 2015.
MLAs are due to vote on the matter today.
However, Michael Doran, the chairman of RHA (NI), has sent a letter to MLAs warning them of what he believes will be the consequences of voting in favour of the plans.
He said many business owners have invested significant amounts of money - in many cases more than £1m - into the local economy by investing in the RHI technology.
He also said much of that investment has been in the form of loans which they will be unable to renegotiate. "The RHA calls for audits, both technical and business, for all installations," said Mr Doran.
"If any boiler operator is found to be acting fraudulently they should be removed from the scheme, prosecuted and monies which have been claimed illegally should be returned. We also recommend that an economic assessment of the cost of the scheme which assesses the socio-economic and environmental benefits to Northern Ireland should take place.
"If the proposed course of action is carried out, following a vote in the Assembly, it may well result in a further drain on the public purse, as a result of having to make reparation for illegal amendments to the contracts."
Mr Doran referred to a previous legal challenge of a decision to rescind payments by the Department of Energy and Climate Change in England, which was subsequently overturned.
"The draft legislation is flawed, and is likely to be challenged in court due, among other reasons, to the lack of consultation and an unlawful interference with accrued or vested rights," said Mr Doran. "It is being driven by a political agenda."
However, an expert in contract law from Queen's University, Belfast, has said amendments passed by legislation could be legal.
"There would be no difficulty at all if they could prove people were extracting payments from the Department of Enterprise, Trade and Industry (Deti) without actually complying with the scheme," said Dr David Capper, reader of law.
"It's where the Assembly tries to take away people's vested rights that they have a problem. They can do so, provided they act proportionately."