Private care home owners have lambasted Devon County Council's scheme to spend more than £11 million on developing "centres of excellence" for dementia care.
The Devon Quality Care Forum, made up of four care home providers, claims the investment to upgrade up to ten of the council's 23 care homes will not meet the need for 10,000 extra beds for people with dementia.
The forum says the authority should instead work with private operators to make the most of existing opportunities.
But the council has reacted furiously, saying the claims are "riddled with inaccuracies". It described them as a "work of such fiction" designed to extract more money from the public purse.
The row comes as the authority reveals the first phase of the upgrades, at Davey Court in Exmouth, Mapleton in Newton Abbot and Woodland Vale in Torrington, which all provide residential care for people with dementia.
Council officers will work with dementia research experts at the University of Stirling and construction company Midas.
Councillor Stuart Barker, who has Cabinet responsibility for adult care, said the facilities would help create "dementia-friendly communities", and would incorporate the latest technology, as well as services to support people with dementia who still live in their own homes. Mr Barker said the council would do everything possible to minimise the impact on vulnerable residents.
"We will not be asking people to move from the home while the work is ongoing, and once the centres are complete, our current residents will be able to carry on living there."
Plans for the three homes are still being developed, and are expected to be shared with residents and families before applications are submitted.
The remodelling is expected to include larger bedrooms, gardens, communal areas and space to be used for outreach support.
The council hopes the private sector will also help meet the need for specialist care, and is making £800,000 a year available.
But Graham Greenaway, of the Devon Quality Care Forum, warned that it did not go far enough to address the need for 10,000 extra places for dementia sufferers in Devon by 2030, which he said meant 500 new beds were needed each year.
He claimed the plans would not add a single new bed, and said: "At the same time, DCC are presiding over the greatest loss of charitable, not-for-profit and private care homes in decades."
He said the council paid £1,200 per week for dementia care in its own homes, but just over £400 per week to other operators.
He urged the council to work with care providers to fill the 500 beds which were currently unoccupied in the private sector.