A COUNCIL had to spend £500,000 fighting a construction firm's claim for about £2.7m to be added to its bill for building a town's new swimming pool.

Problems with the construction of the six-lane, 25-metre pool at the Louisa Centre sports complex in Stanley, County Durham, meant that it opened in August 2004 more than a year later than planned.

Derwentside District Council originally expected the pool - a replacement for the Burns Pool that closed in 1997 because of structural problems - to cost about £5.7m and it won a £3.5m grant from the Sports Lottery Fund towards it.

But the project was beset with delays and problems, including a supplier of insulating panels going into liquidation and a wall having to be re-built because the council was unhappy with the work, and there was a dispute about who should pay for putting the problems right.

The Northern Echo has learned that the pool's builder, AWG Morrison Construction Services, took the council to court, claiming a total payment of about £8.7m after being offered 6m by the council during mediation.

The claim, which was opposed by the Labour-run council, went to the High Court last October where, at the judge's suggestion, the two sides reached a settlement.

It was subject to a Tomlin Order, a confidentiality agreement which bound both sides not to divulge details.

But a letter about the settlement has been sent anonymously to The Northern Echo.

Written by the council's executive director Mike Clarke in response to a councillor's question and circulated to all members, it says that a final bill of £6m for the pool's construction was agreed, with the firm undertaking to make good any remaining problems.

Mr Clarke added that the council's lawyers had estimated that a settlement could have cost £6.15m, so the agreement was acceptable, and that the council incurred £500,000 in legal costs in the last financial year because of the dispute.

He said the judge suggested that both sides should settle the case "since it was likely that the result of the High Court action would not be definitive".

The council's Labour leader Alex Watson told The Northern Echo: "We have saved the council taxpayers money and they have got what we said we would deliver for the people of Stanley, a new pool.

"We have spent money on legal costs but we would have had to pay a lot more if we had not. At the end of the day it is a job well done."

Harrison Construction Services, which was previously owned by the AWG group - which includes Anglian Water - was bought earlier this year by Galliford Try whose spokeswoman said: "The company does not wish to comment".