B737 First Officer reported while they were holding short for takeoff; tower instructed a smaller jet to taxi around the B737 with inadequate room to safely clear it. The Captain advised Tower of the problem and was then cleared for takeoff.

Narrative

We were given instructions to taxi to [Runway] XXL via [Taxiways] 1/2/3 and hold short [Runway] XY. After holding short XY; we were instructed by Ground to continue and monitor Tower. Approaching XXL we noticed a Citation Longitude holding short of [Taxiway] 3 on [Taxiway] 4. Although they were delaying some departures due to the weather; we had received no delay notifications or instructions to hold for the other aircraft and pulled forward along the curved center line; and stopped short of XXL. We heard no communications from Aircraft Y at this point. Arrivals were slow to come in and after a few minutes Tower asked an aircraft on final to slow to get traffic out. Aircraft Y made their first transmission stating they were ready to go. Tower then asked if they could 'get by the airliner' which Aircraft Y immediately said yes and began to pull forward and come right of their centerline in attempt to get around us. I saw what was happening and informed the Captain who was noticing the same thing. I also quickly made a radio call saying 'there's not enough room' but it may have been blocked by Tower issuing the planned sequence for departures. The Captain noticing what was going on took over the radio and said we would have to turn out of the way to allow Aircraft Y room to get by us. Tower then changed us to line up and wait for immediate take off. Aircraft Y response was annoyance that we were going first and continued to insist that they could fit between us and the edge of the taxiway. We departed and continued to ZZZ without incident.If there is a doubt; there is no doubt. Even a small perception that something is unsafe should have everyone stop and evaluate the situation further. Tower should not have relied on just one aircraft to decide if there was enough room to taxi by us. Later investigation about Aircraft Y led us to discover that the aircraft has nearly 70 ft. wingspan with rather large curved winglets. From our view point there was no way it could safely taxi between us without hitting our nose or departing the taxiway. There was plenty of opportunity for Tower to have us hold short elsewhere or use [Taxiway] 5 for departure after turning us out of the way. I also would be very curious to know Company's reaction to a pilot putting their aircraft and passengers at risk just to go first and having a pilot argue about a perceived safety issue. Coming several feet off centerline; attempting to squeeze between a very large transport category aircraft; risking collision with a fully loaded 737-900ER and coming close the edge of a lighted taxiway with tall edge lights and then getting upset when a safety issue is called into question are very concerning to me. If the Captain had not pressed the issue I believe that damage to one or both our aircraft would have occurred.