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Borough planners aren't happy with the inclusion of a restaurant in the £1 million scheme for Toft Road.
And now the future of the revamped old folk's facility could be under threat.
"I don't think the library will be prejudiced," said county chief librarian Ian Dunn.
"But I would be disappointed if we ended up with a new library and an old wooden hut out in front of it."
He admitted that there was a risk of there being NO new old folk's meeting place at all if a compromise was not reached.
A secret meeting last week - designed to iron out problems before the planning application goes before borough councillors in February - ended inconclusively.
But Clr Tony Mazzeo, Knutsford's planning chairman who was at the meeting, said a compromise could be reached.
"We don't necessarily want a restaurant," he said. "But if we've got to have it we've got to have it.
"If we don't have the library restaurant we could have more houses. It could all be moved around."
Under a private financial agreement, the developers will pay for the library and community centre in return for the opportunity to build flats and the restaurant.
If there is no restaurant then the developer could bid for more flats to make the scheme pay - or decide not to build the old folk's club.
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