Simon Ogden, chairman of the Sheaf and Porter Rivers Trust, spoke out over progress in Castlegate, which landed the huge sum nine months ago.
He says the plans are vague, there is no timetable for spending and public consultation has yet to begin. The first on-site activity - boreholes for survey work - starts next week.
But the money must be spent by March 2024 or it goes back to the government.
Mr Ogden said: “Winning £20m of Levelling Up money back in October 2021, the majority for reclaiming and restoring the castle site, was a huge achievement by the council.
“But since then the trust’s representatives, along with other Castlegate partners, have been asking, with little success, for a programme of work and public engagement and for representation of senior officers and councillors at its meetings.
“Nine months after funding was approved and with only 22 months until the spending deadline, survey work is only just about to start and there is still no fixed date for public consultation.
“Whilst some dialogue has finally started we feel the project as a whole is lacking in clear leadership, disconnected, under-resourced and that the support, experience and goodwill the partners such as the voluntary friends, trusts and universities are offering is in danger of being wasted.
“We only want to help and to get the best and most ambitious outcomes for Sheffield people.”
Other Castlegate partners include Friends of Sheffield Castle, the University of Sheffield archaeology department, and Friends of the Old Town Hall.
Sheffield City Council’s Levelling Up Fund bid states: “Castlegate is the birthplace of Sheffield. At the confluence of the River Sheaf and the River Don, this was once the heart of the city, and the site of the castle demolished in 1648.
“Once a thriving commercial area, it has lost its identity and purpose. The Castle project will re-establish Castlegate as a vital part of the city centre.
“The River Sheaf will be de-culverted and complemented by new green space and public realm. Land will be readied for future development, with a first anchor already identified.”
Discussions are underway with The Sheffield College for a new sixth form and adult education facilities, the council says, adding: “Other plots will be activated by ‘meanwhile uses’ that encourage healthy lifestyles.”
The disused Market Tavern on Exchange Street, owned by the authority, is also in the plans.
A council spokeswoman insisted the works were on track and surveys had been conducted for a masterplan and detailed designs. And the money would be spent by the March 2024 deadline.
She added: “Public consultations have already begun and carried out by the live works team who held a series of workshops during July. More will follow once the Masterplan and design ideas are more developed.”
Meanwhile, working groups were being set up which would include members of the Castlegate Partnership.
Tammy Whitaker, head of regeneration and property, is lead officer and Julie Grocutt and Mazher Iqbal, co-chairs of the transport and regeneration committee, were the lead councillors, she added.