The 'bombshell' was dropped at the last town council meeting when plans to buy £140,000 of new skateboard and play equipment for the Park Lane recreation ground had just been outlined.

Councillors believed that Banner Homes – which is building 87 new homes at Wattons Lane – had to contribute £50,000 towards the play facilities as a condition of it gaining planning approval.

But county councillor John Appleton (Con, Southam) told them he understood the money was going to be spent on floodlighting a Southam College football pitch - a decision which Stratford District Council planning department has since denied.

Speaking at the meeting Coun Glesni Thomas (Lab, Mill Hill) said: "It's an absolute disgrace that this money has been hived off into a scheme that doesn't comply with the reasons for the money being given to the community.

"The under-12s that live on the estate will not be able to use the football pitch at Southam College.

"They need facilities close at hand and that's what is normally provided with new developments.

"This is the first time this has happened. Why are our district and county councils transferring money from one pocket to another?"

Coun Bransby Thomas (Lab, Merestone) added: "I have been involved with the education authority for many years and have no idea why they are getting involved in this planning decision.

"It is totally inappropriate that education and planning have cooked this up between them - no matter how worthy the Southam College project is.

"I want to know who has made this decision and what was the logic, because it defies rationale."

Deputy mayor Jim Taylor attended the planning meeting when Banner Homes received planning permission.

He said: "It was made crystal clear that the amount of open space they were providing was inadequate.

"But because the main recreation ground was next to it, they would pay for improvements of £50,000."

Play project group member Coun Andy Crump (Ind, Brownsbridge) said: "We will now need to raise £140,000 for the new equipment and it will be very difficult to get the money without this amount already being committed."

But in a letter to the town council responding to the criticism, head of planning at Stratford District Council Pat Reid has declared no decision on how the money will be spent has been taken.

He said: "The planning agreement states that the district council will use the recreation contribution for the maintenance of accommodation or equipment at existing recreation and leisure facilities or enhancement or provision of recreation and leisure facilities within the vicinity of the site and that it should be repaid if it is not committed within seven years of receipt.

"The decision on how to use the £50,000 contribution will be made by this council in accordance with the terms of the agreement.

"I shall ensure that the town council is involved in that process."