Council chiefs predict it will cost more than £1.5 million if they have to fight planning inquiries before building at two controversial waste sites.

A public inquiry into building an incinerator at North Quay, Newhaven, scheduled to begin operating in October 2009, is expected to cost at least £750,000.

Brighton and Hove City Council and East Sussex County Council have agreed to compensate contractor Onyx Aurora if the burner is not constructed on time.

An inquiry into a second major waste site at Pebsham, Bexhill, is expected to cost another £750,000.

Documents seen by The Argus reveal the authorities have agreed to pay 90 per cent of inquiry costs and consider compulsory purchase of the two sites.

All costs associated with compulsory purchase would be met by the councils, which think it could cost £500,000 to buy land needed by the contractor.

The controversial North Quay incinerator is key to the success of a 25-year private finance initiative waste disposal deal awarded to Onyx Aurora, worth £1 billion.

The documents reveal millions of pounds of Government credits would have to be paid back if the incinerator is not built. No detailed site investigation of the North Quay site had been carried out before the deal was agreed in March, despite Onyx Aurora's worries about ground conditions.

Duncan Jordan, the county council's assistant contracts director, said planning inquiries might not be needed and would only be pursued if there was a strong chance of winning.

He said the costs of compulsory purchase were covered in the contract with Onyx Aurora and there was no engineering reason why an incinerator should not be built at North Quay.

The burner has provoked fierce opposition.

Lewes MP Norman Baker said: "My constituents in Newhaven will rightly see this as adding insult to injury. Not only is a wholly unwanted incinerator being hoisted on them but they are being expected to pay more for it as well."

Keith Taylor, Green Party convenor of Brighton and Hove City Council, said it was "absolutely outrageous" to pay inquiry costs for a private company.

He said: "This is a further reinforcement of just how wrong the decision was to proceed with this incinerator."

A planning application for the North Quay is not expected until the results of a continuing public inquiry into waste plans which underpin the Onyx Aurora deal are known, probably in mid-2004.

The councils have firmly opposed releasing the documents at that inquiry, insisting they are confidential and not relevant to the hearing.