A LEGAL bill of £858,000 has been served on St Albans District Council by the Government following the conclusion of the Napsbury public inquiry and the granting of planning permission on the site.

The council, which has just £500,000 in its reserve budget, has vowed it will not hand over the cash without a fight.

However, it has approached the Department for Transport, Local Government and the Regions, for permission to use a slice of its £5.2 million capital reserves accumulated mostly from the sale of council houses to pay the bill, if necessary.

Councillor Chris Whiteside, cabinet portfolio holder for planning and conservation, stressed that no sum would be an acceptable amount for the council to pay, but the council was working to reduce to bull to something more realistic.

He said: "Before we pay up this amount of money it has got to be checked over with a fine tooth comb. The council is seeking advice from costs experts and intends to submit its formal response to the bill by the end of September."

The Napsbury Hospital site in Shenley Lane, London Colney, became the subject of much debate when its owner, North Thames Regional Health Authority, applied for planning permission to demolish the disused hospital and build houses.

The site contains a number of Edwardian listed properties, which the council sought to protect and which led to a 57-day public inquiry in 1998.

The additional expenses were incurred because a viability study had to be carried out after the council failed to indicate which locally listed buildings it wished to see retained.

This study and the time taken to discuss the issue led the Secretary of State for Health to bill the council for costs just short of £1 million.

A spokesman for the council emphasised that an internal review into council procedures relating to its preparation for a public inquiry was in its final stages and due to report in the next two weeks. "We need to look carefully at the whole process," she said.

Cabinet portfolio holder for resources Councillor Chris Oxley defended the council's decision to try to protect its local heritage.

But, he said: "We now face a potentially sizeable bill. The council would prefer to spend money on front line services for residents rather than legal and professional fees."

The health authority is in the final stages of negotiation with a buyer. It refused to confirm the developer's identity but the council confirmed it is in discussion with Crest Homes about a planning application for 420 homes.