The Malta Playing Fields Association will file a constitutional case against the government next week in a bid to retain and develop a plot of land in Ta' Xbiex, which is on a long-term lease.
The Infrastructure Ministry told the association last year it wanted the land back so that it can give it to the Royal Malta Yacht Club, which lost its own premises on Manoel Island as a result of the Midi development.
But the association is insisting it has the right to the land and that it has all the necessary permits to build a lido there.
The site used to be available to the association on encroachment terms but in 2002 a contract was signed for the property to be leased on temporary emphytheusis for 49 years. The association says it cannot therefore understand how the government believes it has the right to just take the land back.
Replying to the association's comments, the government insists it has every right to take the land back because it is public property.
Since local councils were set up, the running of playing fields stopped being the association's job, the ministry says.
The government feels it can make better use of the land in question by giving it to the yacht club, which needs the land close to the shore. The government says it is obliged to do so because the club lost its land on Manoel Island.