Albury councillor Murray King said he was "livid' with Wodonga's decision to withdraw from plans to purchase land on the causeway to develop the riverside park.

Wodonga's exact reasons for going cold on the project remain under wraps, but the first term mayor said he and chief executive Mark Dixon were in Canberra on Wednesday and met with Deputy Prime Minister Michael McCormack to discuss the Albury-Wodonga Regional Deal, including "opportunities for our city on Gateway Island".

"With respect to comments published in today's media regarding a tourist holiday park on Gateway Island, it includes an isolated and questionable view that Wodonga Council has not acted with honesty and integrity under the Two Cities One Community partnership is insulting and refuted in the strongest terms," Cr Poulton said in a statement.

"The two councils have, and continue to, collaborate on many ventures including Visit Albury Wodonga, Halve Waste; strategies on the natural environment and smart communities, more recently Grant Guru and the regional cricket hub; and, jointly hosted the Upstream and Sustainable Living festivals to name a few.

"At the end of the day, the council's top priority is to make decisions and act in the best interests of our Wodonga community.

"The council has made a commitment to confidentiality as requested by all involved parties."

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Meanwhile, the Victorian government has disputed claims it's on the brink of pulling out of the regional deal.

"We are committed to the Albury-Wodonga Regional Deal, which will allow us to capitalise on the opportunities and smooth out some of the challenges cross-border communities face," a spokesperson said.

"We recently undertook business and community consultation about the region's specific needs to help us plan for the best possible long-term outcomes.

"We look forward to seeing how the deal can best meet these needs through new and existing commitments.

"This is the first cross-border deal in Australia and will support local economic growth and productivity to make the region an even better place to live, work, visit and invest."

Other deal partners have privately expressed concerns about Victoria's commitment levels due to its present financial position due to COVID-19.

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