The Miss Ulster event, a heat in the Miss Universe Ireland competition, is planned for Saturday at Parliament Buildings.
But a row has blown up over the contest rules - which state that entrants must be aged 18-24, over 5ft 7ins tall and sized 8-12 - and questions have been raised over Stormont's suitability as a venue.
UUP MLA Jo-Anne Dobson was to be a judge, but on Tuesday withdrew from the event.
"I was not aware that this competition excluded anyone from entry and, had I known this, I would not have agreed to take part," she said.
Whilst I have no issues with modelling as a career, Parliament Buildings is all about inclusivity.
Jo-Anne Dobson, UUP
Earlier DUP MLA Arlene Foster had likened the beauty contest to "Father Ted's Lovely Girls competition" and criticised the impact of such events on the self-esteem of young women.
"Today my colleague Paula Bradley spoke to an academy of almost 100 young women who are interested in politics in Stormont," the Enterprise minister added.
"She was embarrassed that the discussion was on this event and not on major policy issues. Many of the young women were deeply unhappy about the event structure and the message it was sending out.
"Those MLAs backing this type of event should think again."
Sinn Féin MLA Megan Fearon also claimed the situation was embarrassing.
"The issue of equality for women has still not been achieved and promoting a competition where women compete against each other, only to be judged on their appearance, reinforces the attitude of women as sex objects and second class citizens," she said.
Alliance MLA Anna Lo added: "We should not be encouraging girls and young women to think they are only deemed beautiful if they look a certain way. They are already faced with airbrushed images in magazines and newspapers without this superficial world coming to their doorsteps."
But the organiser Michelle McTernan has defended both the competition and its chosen venue, denying that such events are degrading to women.
"Lots of girls aspire to be models and this type of contest is a safe way for them to dip their toe in the water and learn valuable lessons about themselves and their skills," Ms McTernan told UTV.
"If they want to pursue their dream to model or get involved in the beauty industry, then a contest like this will give them confidence and contacts.
"They are ambassadors for Northern Ireland and are projecting a happy, healthy image of our youth in a confident manner which will inspire others."
Isn't it much more degrading to women to say they are incapable of making their own choices? No-one has forced the girls to take part in this contest ... Their confidence should be celebrated.
She insisted that the rules adhere to an international standard set by the Miss Universe contest, which the winner would have to comply with to progress in the competition.
"I did not make these these rules. These are the same rules as for other local beauty competitions, such as Miss Northern Ireland," Ms McTernan added.
"I do, however, organize plus size modelling competitions so there are doors and opportunities for girls over size 12 to enter future modelling competitions."
She also pointed to a number of professional women from Northern Ireland, whose backgrounds in modelling have enabled them to progress in their careers - Alison Clarke, Zoe Salmon, Tracey Hall and Gemma Garrett.
"Don't forget, unlike most other professions, women actually earn much more than men in the modelling industry and have the opportunity to control their own careers and destiny - I wouldn't call that degrading," Ms McTernan said.
She also backed Stormont as the venue as a building funded by public money, stating: "There should be space for all to use it in what is ultimately a positive way - this is a positive news story coming out of Stormont for a change."
The event will be the second Miss Ulster competition to be held at Stormont.
It will also act as a showcase for local designers who are taking part, including fashion and design students at Belfast Metropolitan College.