And FF9 was always meant to be an FF. You miiiight possibly be thinking of FF10, which started out as an original concept by Yusuke Naora:
But even then, there was no rival teams in a competition for the FF title or anything. Which is sad because that would actually have been badass in a way.
Ironically the only time something like that actually happened is with Square Enix's Fabula Nova Crystallis project.
You seem very knowledgeable on the subject, probably more so than me, but I too remember hearing something about how Final Fantasy IX was originally designed to not be a numbered entry, rather it would be Final Fantasy Gaiden, a spinoff, like Tactics and Adventure. Granted, I can't find an official source on that, but there is quite a bit of discussion across message boards.