A TOWN council has threatened to take legal action unless it is paid £3,000 it is owed by an environmental regeneration group.

Barnard Castle Town Council has written to Groundwork West Durham demanding the outstanding money is paid within seven days or it will begin legal proceedings. The council paid Groundwork £3,000 in March 2003 to repair and upgrade footpaths in Flatts Wood.

The money was to be reimbursed to the council when grants for the project were received by Groundwork.

However, at the latest meeting of the town council, Councillor Alan Wilkinson said the money had still not been received. He also pointed out that signs paid for by the council had still not been erected by Groundwork.

Council clerk Geoff Bosworth said: "There's bound to be some delay, but two and a half years is a long delay."

Groundwork said it did not know there was a problem with the money and has begun paying it back.

Operations manager Julie Form said: "We were under the understanding that this was an ongoing project.

"There's still some money that Groundwork have and the money that was discussed is in the process of being paid.

"Typically, it does take time to get from start to finish on these projects and we've always known that there's a payment to be made.

"We've always had a good relationship with the town council, and as far as I'm aware we're meeting them to finalise information boards."

The council has decided not to go ahead with a third phase of the project, along Tees Bank, as it is outside the parish boundaries and councillors said it was not within their remit.