Stansted Airport has rejected Uttlesford District Council's offer of £1.4million to cover its legal costs for an appeal over its expansion to 43m passengers a year.

The airport has instead made a counter-offer of £2.2m to Uttlesford District Council, according to a council report.

The council was ordered to pay the airport’s legal costs after it lost an appeal against the increase in passenger numbers last year. In June, it voted to offer the airport £1.4m, including £1m paid on account.

According to the report, Stansted’s counter-offer also includes the £1m already paid on account, but not legal costs associated with the settlement negotiations.

Councillors will now meet next week (October 11) to vote on a revised offer to the airport of £2.05m. According to the report, this would consist of £2m in respect of the claim for costs itself and £50,000 of interest.

It could also make a second “all-in” offer of £2.1m, which would include all interest and costs incurred by Stansted Airport in negotiating the settlement, the report continues.

According to the report, these new offers have been supported by advice from the council’s costs lawyer, who also advised the previous offer.

A section read: “The Council has a fiduciary duty to the taxpayer for the effective and economic use of their money. It has a duty to demonstrate and act in good faith in its negotiations.”

However, the bill could now wipe the council’s Strategic Initiative Fund, which had a balance of £1.65m before the £1m was paid on account in June.

According to the report, the Medium Term Financial Strategy Reserve would be used for the excess of £437,000. If the airport rejects these offers, the settlement could be dealt with through mediation.

As with the previous offer, the new offer would be made under Part 36 of the Civil Procedure Rules, which gives some legal protection to the council should the matter have to be decided in court.