Work to demolish the sandstone wall on Falkland’s Pleasance had been delayed to allow a new working group to examine safety and conservation issues.
Councillors said they were “absolutely livid” when they discovered that a 20m (65ft) section had been knocked down.
Locals have blocked access to another section of wall. Developer Lomond Homes said the wall could not be made safe.
A report by structural engineers had said that the wall should be knocked down for health and safety reasons.
However, a meeting took place on Tuesday between Fife Council and Lomond Homes.
This produced a verbal agreement that only the top part of the wall, which posed an immediate risk to the public, was to be removed until a further meeting with Historic Scotland took place on Friday.
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