The conflict resolution centre at the Maze is predicted to lose more than half a million pounds a year, it has been claimed.
Ulster Unionist leader Mike Nesbitt said more than 100,000 visitors were expected annually at the former prison site near Lisburn. Even if the development hits its target the taxpayer faces a £650,000 bill, the Stormont MLA warned.
"In this day and age, when money is in such short supply, who on earth goes ahead with a project they know will not pay for itself?" he asked. "This is madness."
The Maze prison held some of Northern Ireland's most dangerous inmates and was the site of the republican hunger strikes. By 2000 all prisoners had left, but what happened to the 370 acres of land has become a contentious issue.
While much of it was intended for other uses, with the Royal Ulster Agricultural Society (RUAS) due to hold its show there, for years unionists and nationalists have disagreed over whether a peace and reconciliation centre should be included.
Republicans championed its potential to attract tourists and help people learn from the 30-year troubles via a peacebuilding centre. Many unionists feared retaining areas like the H-blocks where the hunger strikers were held or the prison hospital where they spent their last days meant it would become a "shrine to terrorism".
Last year a Maze/Long Kesh Development Corporation was announced with businessman Terence Brannigan as its chairman. The corporation briefed Mr Nesbitt and other members of a Stormont committee this week. The UUP leader said the projected costs for the conflict centre were staggering.
He said: "I have consistently argued that while we need a peacebuilding centre, it should be at the site of the old Crumlin Road Gaol and Courthouse. Yet we sold the courthouse for a pound some years ago, and now we add insult to injury by asking the taxpayer to stump up what could end up as millions to keep a new facility afloat at the Maze."
Sinn Fein MLA Gerry Kelly has said overhaul of the former prison camp is a sign of changing times and should benefit everybody. He said: "We look forward to the further regeneration of the whole site so as to maximise its economic, historic and reconciliation potential."
Mr Nesbitt delivered a speech in Bessbrook in South Armagh and said official approaches to the broader problem of dealing with the past were incomplete, imperfect and deeply imbalanced. He said: "The result is that we are re-writing history, painting the state and its agents as the villains. We must demand honesty about how we deal with the past."