The government's adviser on architecture weighed into the row after it emerged last week that the foundation is considering taking on the role if CABE is officially axed following the loss of its DCMS funding.
"The Prince's Foundation has a stylistic bias and so the wider public interest could never be served by a design review service run by them," a CABE spokeswoman said. "CABE has always been impartial in its support for all well-designed schemes," she added.
RIBA president Ruth Reed said the foundation is "entirely inappropriately placed" to take on design reviews and insisted that they should continue to be delivered independently.
But foundation chief executive Hank Dittmar said: "Not everyone would agree that design review has been provided in an impartial manner." He viewed RIBA's position as "highly suspect" for a professional association that is "meant to represent all points of view".
Meanwhile, the London Development Agency has started a 90-day consultation to decide which jobs to axe while still meeting its contractual commitments.
More than 200 jobs look set to be shed after the agency was told last week that it would only receive funding for contractual commitments. English Heritage is also to cut 200 posts after a 32 per cent cut in funding.