A legal battle over the level of compensation that should be paid for land acquired for the London 2012 Olympic Games has reached the High Court.
In a case with potentially tens of millions of pounds at stake, building group Rooff claims it should have been offered a higher rate of compensation.
Its payment was assessed on the basis that the brownfield land - now part of the site of the Olympic swimming pool - was only suitable for business and general industrial use.
Rooff argues the area should have been more highly valued as also suitable for mixed use, including housing.
Government planning chiefs have rejected the claim.
The land at the Carpenter’s Estate in Stratford, east London was acquired by the London Development Agency (LDA) for the Games.
Rooff is fighting to establish it was in an area earmarked for regeneration and, but for the Games, planning permission would have been given for residential development.
If Rooff wins its battle, the government could face having to pay millions of pounds in extra compensation as part of the price for staging the Games.
More than 70 businesses displaced by the Olympics project have launched negotiations with the LDA over compulsory purchase order payments.
Today lawyers for Rooff launched the first stage of their campaign by asking a High Court judge sitting in London to allow the issue to be reconsidered.
They asked Mr Justice Blake to overturn a July 2009 decision of the then communities secretary John Denham upholding a planning inspector’s dismissal of its claim following a public inquiry.
Rooff had appealed under section 18 of the Land Compensation Act 1961 against a “certificate of appropriate alternative development” issued in March 2008 by Newham Council - the local planning authority.
The certificate indicated that, had the LDA not acquired the land under compulsory purchase powers, planning permission would have been granted only for lower-value business and general industrial use.
Today John Hobson QC, appearing for Rooff, argued that the community secretary’s decision to dismiss Rooff’s appeal was “irrational”.
He said the land was “a classic brownfield site” that had been used as a storage depot and lay within an area that had formerly been in active commercial and industrial use.
But, by November 2005, when the LDA issued its compulsory purchase order, that use was in decline and significant parts of the area were vacant and derelict or underused.
Hobson said: “It was a classic brownfield area that was awaiting beneficial regeneration and had been earmarked for that purpose.
“It was indeed shown that high quality, mixed-use development would have been the appropriate means of achieving that regeneration.”
The hearing continues today.