A council could be forced to pay millions of pounds in compensation after closing a pier amid fears about its safety.

Yesterday the Court of Appeal ruled a legal firm acting on behalf of a now defunct bingo hall which used to operate on Hastings Pier can seek compensation.

The claim originates from June 2006 when the council used emergency powers to close off the pier after metal fell from the underside of the Victorian structure.

Stylus Sports, which ran a bingo hall and amusement arcade on the pier from 2001, was set to host a disco for 500 people the day after the closure.

Manolete Partners, which took up the case for Stylus Sports’ creditors after the company was liquidated in 2011, hopes to settle the amount with the council over the next few months.

The council’s own budgetary papers reveal it anticipates a £1.8 million claim but Manolete Partners chief executive Steven Cooklin told The Argus it will be looking for a sum “far in excess” of council estimates.

Council officials said the authority was “bitterly disappointed” with the outcome and any compensation payment would take away funds from the public purse.

They warned the ruling could have serious implications for any council wishing to use emergency powers over safety concerns in the future.

Lord Justice Jackson said the “true culprit, Ravenclaw”, the pier’s landlords at the time who failed to carry out significant repairs to the pier, is “out- side the jurisdiction” because the company is based in Panama and effectively “beyond the reach of any enforcement procedures”.

The council was also criticised in the judgement for failing to take action earlier and in the quiet off-season which would have reduced the impact on the operating firm of emergency procedures.

Lord Jackson said the council will be entitled to argue in the settlement that the loss of profit caused by the council’s conduct must be “substantially reduced by reason of the structural condition of the pier”.

Mr Cooklin said the decision vindicated the original decision made by the High Court.

He added: “This judgement has just delayed the process from a year ago and has cost the council a lot more money and our legal costs just to wait another year.”

A Hastings Borough Council spokesman said: “We are disappointed to be now facing a compensation claim, and having to pay legal costs, when all we have ever sought to do was ensure that the pier was safe for members of the public.

“We simply could not have allowed the disco to go ahead in June 2006 knowing that pieces of the underside had fallen off, that parts of the pier’s structure were in a dangerous condition, and that an independent engineer had said that parts of the pier were likely to be unsafe under ‘crowd loadings’.”