Outline permission has already been granted for 6,000 homes for an estimated 15,000 people at Welborne, north of Fareham.
Hampshire County Council chose Volker Fitzpatrick to to design, build and deliver upgrades to Junction 10 of the M27 to accommodate the development.
But, more than a month since work started on the first homes, funding is still not in place for the upgrades.
It would provide a new motorway underpass to the west of the existing M27 Junction 10, three new slip roads and construct a new dual carriageway linking the new slip roads to the existing road network.
But a report said that the county council would write to bodies, including Homes England, Welborne Land Limited, Fareham Borough Council, the Department for Levelling Up Homes and Communities (DLUHC), National Highways, and the Department for Transport (DfT), saying extra funding was needed by the county council to continue as a delivery body into the building phase.
During a county council cabinet meeting in December 2023, Tim Lawton, assistant director of highways and transport, told members it was unlikely the Department of Transport and National Highways would provide further funding for the project as it would provide “very little benefit to the strategic road network”.
This week, a council spokesperson said: “Further discussions with relevant parties are still ongoing to determine whether the M27 Junction 10 project can proceed into construction.”
Also part of the development would be a district centre, supporting neighbourhood centres, a new secondary school and three new primary schools with green sustainable credentials such as an electricity supplying substation.
Almost half of Welborne will incorporate green space from gardens, woodland, allotments, community orchards, open spaces and formal parks. Trees that will line the roads are being planted before the houses are being built.
Buckland, the master developer, said a total of 700 homes are expected to be approved for building by the end of this year.
It said: “Planning for 71 village centre homes has already been submitted. The consultation is progressing and should be approved in the next few months with building likely to start this autumn/winter.
“Applications for around a further 152 homes will be submitted in the near future.”
The homes range from one to five bedrooms, including flats, terraced houses, semi-detached and detached two-to four-storey homes.