A new twist to the troubled project to renovate Hitchin Town Hall could see the landmark fail to open its doors despite the costly facelift which is now nearing completion.

The chairman of the group formed to run the new-look venue says that North Herts District Council has turned down their offer to walk away from the project for £500,000.

But because Hitchin Town Hall Ltd still has a contract in place, unless it stands aside the site could remain shut – or even sold off in a property deal.

The council is due to discuss the latest developments in a behind closed doors session this evening.

Mediation talks in May involving district councillors and representatives of the community interest company saw a verbal offer put to the council naming the settlement figure.

If the company steps aside, it’s expected that the council will take over the running of the site in Brand Street, which includes a new district museum – but it can’t just walk away because it has substantial debts run up in the early stages of the project, before the relationship between both sides broke down.

Chairman Stephen Pike told the Comet: “The verbal offer of a £500,000 pay-off was made to the council to ‘buy us out of the contract’ and we would both walk away from the table leaving the council to run it as they see fit.

“By refusing, the council runs a serious risk of the site being sold as our bankers would look to crystalise their loss of charitable funding and working capital by putting it on the market – and the site could fail to open at all.

“It would work just like a bank repossesing a house if mortgage payments are not met.

“We have a portal to a £6m property investment, and if we are not paid then in theory the site could be sold instead of opening as a town hall and musuem as intended.

“It is hugely disappointing to me – the reason we are bringing this to light and removing confidentiality is this situation has been dragging on for so long and we want it resolved.

“The councillors do not seem to understand the substantial commercial risk by refusing our offer.

“The elephant in the room here is the huge commercial risk the council will run if the legal ownership of 14 and 15 Brand Street are allowed to go to the market by a bank-appointed receiver.”

A spokesman for North Herts District Council said: “The mediated meeting was held under confidential conditions. A confidential report on Hitchin Town Hall Ltd’s submitted proposals will be considered by the council at the meeting this evening.”