Last month Cornwall Council's Independent-Lib Dem cabinet voted to go ahead with the bid for Truro to secure the title in 2023.
At the time the city's mayor said he had not been consulted about the plans.
The decision will now face further scrutiny after Conservative councillors complained.
More on the culture bid and other stories from Cornwall
They claimed Truro started working on the bid too late and other interested cities, including Leeds and Milton Keynes, had been putting together detailed plans for several years.
"We've been told for four years we've got no money, we're a 'no-money council' and you suddenly produce more than £500,000 for a bid to become the European Capital of Culture," said councillor Fiona Ferguson.
"I think it's entirely unrealistic to spend money on this sort of thing. It's a vanity project."
She claimed Brexit also meant any money invested in the project could be wasted, as the UK may no longer even be eligible to take part.
However, in the past three non-EU cities have held the title, Istanbul in 2010, Stavanger in Norway in 2008 and Reykjavik, Iceland, in 2000.
The Department for Culture, Media and Sport, which launched the contest in December, said it was continuing under the assumption a UK city will host the event in 2023.
Cornwall Council said the cabinet's decision was being called in on the grounds that there was "inadequate consultation with stakeholders prior to the decision being made" and that there was not sufficient evidence "on which to base a decision".

John Henry Jones, from Trevor, near Llangollen, went missing in 1970.
His family came forward after the reconstructed face of a man found buried in Staffordshire in 1971 was shown on the BBC's Crimewatch.
But Det Insp Dan Ison, of Staffordshire Police, said DNA tests showed the man was not Mr Jones.
Work had been carried out by a dental expert which suggested similarities between Mr Jones's teeth and the man found in Burton-upon-Trent.
"While the DNA test has not resulted in an identification of the body found in Burton, we have been able to rule Mr Jones out of our enquiries," Det Insp Ison said.
"Forty-six years have passed, but the investigation remains open and we'd ask people to check the image and contact us if they have new information."

The 33-year-old batsman lost his England place ahead of last winter's tour to South Africa and is set to lead the Bears for the whole summer.
"Division One, this year, will be the toughest that it's ever been," he said.
"The two counties that have come up, with Test Match grounds, look strong."
Bell has set his sights on regaining his England place as soon as possible, but is looking forward to playing a big part for the county this summer.
"The squads in the first division get stronger every year. The standard is very high," he said.
"I am very excited about the season. There is a lot of cricket ahead and a lot of hard work ahead and no doubt there will be ups and downs but myself and the guys can't wait for the challenge in front of us."
Alongside Bell, Warwickshire will also have former England batsman Jonathan Trott and current England all-rounder Chris Woakes at their disposal in the early weeks of the season.
And he believes that could be key to the team making a good start.
"It's the first time for a long time that we will have everybody available for the start of a season - usually we've been without a couple of myself, Trotty and Woakesy," Bell added.
"We've got a strong squad which, injuries permitting, will allow us to rotate our seamers the way Yorkshire have done to such good effect in the last couple of years."
After returning from their pre-season tour of Dubai, Warwickshire continue their preparations for the new season with a two-day friendly against Gloucestershire at Edgbaston on 28 and 29 March.
A £500,000 bid for Truro to become European Capital of Culture has stalled amid claims it is a poorly-considered "vanity project".
[NEXT_CONCEPT]
An unidentified body found buried in a shallow grave 46 years ago is not a missing man from Denbighshire, detectives have said.
[NEXT_CONCEPT]
Warwickshire captain Ian Bell says County Championship Division One will be the most competitive ever this summer following the promotion of Lancashire and Surrey.