The Contractor is not starting works as disagrees with the design and specifically of type of material to be used. Are they entitled not to start?
The Contractor can choose not to start if they like however the question of liability for this will then arise. If they choose not to start and it’s later found that they could / should have started then they may not be entitled to a compensation event for the cost and time associated with the delay, if however it’s later found that they could / should have started then they may be entitled to c compensation event.
Assuming you have an NEC3 ECC the right recourse for the Parties to resolve this is through a notification under either clause 17.1 (ambiguity or inconsistency) or 18.1 (illegal or impossible) which the Project Manager should resolve. If you have an NEC4 ECC then the procedure is exactly the same however the clause references are 17.1 and 17.2 respectively.
In the event that the issue is neither ambiguity, inconsistency, illegal or impossible then the right procedure to use would be an early warning notification under clause 16.1 (NEC3) or 15.1 (NEC4), e.g. impair the performance of the works in use, followed by a risk reduction / early warning meeting.
Ideally the Contractor should have instigated either of these procedures as it seems like they were aware first, however if they have not then the duty to notify falls on the Project Manager.