A south London borough council, having been accused of racism, is now being sued for £9 million, it has emerged.
The claim is the latest debacle to hit Southwark council's planning department in a four-year feud which began after the council failed to consult a group of nightclub owners over a nearby housing development.
Last week local government officials received the claim from the lawyers representing the former owners of the now-closed Imperial Gardens nightclub, situated close to Camberwell New Road.
The owners - Raymond Stevenson, Lucia Hinton and Michael Taylor - were not consulted over the construction of an adjacent block of flats by Fairview New Homes. According to one anonymous council official, the nightclub proprietors have always claimed this is because they are black, and that the construction has put them out of business.
In the wake of these claims, the council has brought in a district auditor, local government ombudsman and equality expert Lord Ouseley to investigate the claims and look at how it could improve its equality and diversity framework.
The claim has been passed to the council's insurers who will consider its merits and decide whether to reject it and defend any action in court or negotiate a settlement.
Southwark council's chief executive, Bob Coomber, said: 'We have always taken Raymond Stevenson's complaints over the handling of these planning applications very seriously.
'We have helped him make a claim by paying legal costs and have offered the £1,000 compensation recommended by the Ombudsman. However, the council cannot legally use taxpayers' money to compensate complainants further unless there is a legally recognised and legitimate claim against the council.
'The claim is clearly very substantial and for a much larger sum than has been suggested in the past. As a result we have naturally passed it straight to our insurers who will consider its merits and decide what to do next. We cannot comment further at this stage as it would prejudice the claim.'by Rob Sharp