Bradford Council has reached an out-of-court settlement with the Government over its decision to withdraw financial support of a waste management project.

The authority said it could not reveal the payout figure because Government lawyers would not allow it – but Councillor Andrew Thornton said it was a “good deal” for council taxpayers in Bradford. He said: “I would be quite happy to say what the details of the settlement are – we have got nothing to hide. But Government lawyers will not agree to it. My view will be that this is a good deal for the council taxpayers of Bradford.”

The settlement means the authority and Calderdale Council will not continue with a Judicial Review into how the Department for Environment, Food and Rural Affairs (DEFRA) reached its decision on the project.

The Government withdrew the £62.1 million credits without any prior warning or consultation with the councils, only a few months away from construction starting on site, even though DEFRA had been closely involved in the waste project.

The two Councils were planning to build a Resource Recovery Facility at Bowling Back Lane, Bradford, which would have dealt with all domestic waste from Bradford and Calderdale for 25 years from 2017, and provided about 300 construction jobs and 80 permanent jobs. The plant was expected to process about 193,000 tonnes of waste from both districts and produce enough electricity to power 20,000 homes.

The decision to seek a judicial review was taken following the Government’s refusal to release timely information to support its decision and the process which it followed in removing the essential financial support for the Bradford and Calderdale project.

The councils have made a number of attempts to secure a negotiated settlement with the Government to avoid the formal action, but it is only recently that DEFRA has put forward any substantive proposals. Coun Thornton, executive member for environment and sport at Bradford Council, said: “We took legal action because we felt that DEFRA should be held to account for a decision that has cost our taxpayers millions of pounds. We had a strong case in seeking the judicial review and felt that it was important to expose the full extent of DEFRA’s secret review of waste management projects.

“However, the Council has to balance the cost of legal action against the potential benefit that might arise and we have therefore agreed to settle the case out of court. The Council will now need to consider how it is going to secure a long-term sustainable solution for the district’s waste, as we are determined that any alternative method of managing waste we choose to adopt will be as cost-effective and environmentally-friendly as possible.”

Councillor Barry Collins, Calderdale Council’s cabinet member for economy and environment, said: ‘Withdrawal of Government support has terminated a project that promised reliable recycling of waste, green energy generation and local employment.