It was designed by a friend of Pablo Picasso, adorned with mosaics depicting Oedipus and the Sphinx, and described as Art Deco at its Athenian best. But a row about the building that guidebooks describe as a 'must-see' on the boulevard linking the Greek capital's great classical sites is now threatening to eclipse the opening of Europe's most ambitious museum. All because the 1930s building blocks the view from a restaurant.

Culture Ministry officials say the four-storey architectural gem designed by Vassilis Kouremenos commits the cardinal sin of blocking a visitor's view of the Parthenon from the vantage point of the New Acropolis Museum's dining terrace. Unrivalled vistas have been the biggest selling point of the stunning museum built at the foot of the Periclean masterpiece to promote its golden age wonders - including one day, Greeks hope, the Elgin Marbles, currently housed in the British Museum.

Since construction began on the controversial £94m behemoth, a dozen edifices have been expropriated and demolished to make way for the museum. But the pink-marbled Art Deco building which blocks those all-important views, and an early neo-classical townhouse owned by the Oscar-winning composer Vangelis Papathanasiou (who is believed to have acquired the edifice with earnings from his soundtrack to Chariots of Fire), escaped because they were listed by the government as historic monuments in their own right.

'Tearing them down will not only destroy two unique architectural works but the urban Athenian façade of one of Europe's finest pedestrian streets,' Nikos Rousseas, an architect who is leading the campaign, told The Observer. 'It will go against what the state itself has decreed: that the Art Deco building, in particular, is a work of art that has to be protected.'

Last week, however, the government had a change of heart after Greece's powerful Archaeological Council, backed by the Organisation for the Construction of the New Acropolis Museum, voted that both be torn down in the interest of 'dialogue with the Parthenon'.

'The New Acropolis Museum is the only museum designed for interaction,' its Swiss-American architect, Bernard Tschumi, said in comments interpreted to support the demolition plans. 'The Acropolis and the Parthenon are visible in an unexpected way. The museum is there to show what is both within and outside it.'

Last week a cement-mixer churned in the sweltering heat as labourers laid the marble staircase to the museum's entrance. After 30 years of preparation, procrastination and acrimonious debate, the building that once seemed like a dream, a last resort of the romantically inclined, is finally nearing completion. In September a number of antiquities housed in the current museum on the Acropolis will be craned into the new building. It will open next year.

The Culture Minister, Georgios Voulgarakis, had hoped to sign a demolition order for the Art Deco building this month, but the public outcry stopped him. Increasingly the debate has turned into a full-blooded row as it winds its way through the internet, aided by outraged tourists who visit the scene.

'We have supporters, literally, from all over the world who have learnt about this through our blog,' said Rousseas. 'The great irony is that it should be a view from a restaurant that should spark all this. The Art Deco building was designed with tiny balconies that could not be used [for dining] because its architect believed it would be a sin to chew in front of a monument as sacred as the Acropolis.'