Newcastle City Council has identified a number of sites near East Pilgrim Street that could be used for student accommodation, as part of a wider regeneration project of the area.
However, opposition leaders have said that Newcastle does not need any more student accommodation.
The Liberal Democrats have voiced concerns over the rise in student accommodation in the city in recent years and, in a consultation over the East Pilgrim Street development, said further projects should be discouraged.
A spokesman for the party said: "We are mindful that virtually every available site in the city centre in recent years has been acquired for student housing development, leading to a potential over-domination of some areas of the city centre."
The party recognises that the increase in student developments follows market trends and the associated returns to developers from student tenants, but is concerned about a significant increase to the city centre population and the impact it has on retail and service requirements.
Although details have yet to be finalised, it's understood that the whole area north of Market Street has been allocated for retail developments as an extension to the city's main shopping hub, Northumberland Street.
In addition to student housing, the area south of Market Street could also be used for offices, residential housing and leisure facilities.
Consultation on the proposals closed early September and the council is currently reviewing responses, including those from the Lib Dems.