Wakefield Council has written off a near-£1m debt it was owed by the operators of a waste management tip.
Rubbish from across the UK has been dumped at Welbeck Landfill Site in Normanton for more than 20 years as part of a controversial scheme, which is supposed to see the land eventually restored to a public park.
FCC Environment, also referred to as Welbeck Waste Management Ltd (WWML) run the site, leasing the area off Wakefield Council.
But the local authority's statement of accounts has revealed that £969,000 worth of rental payments were written off during the last financial year "whilst a new lease was negotiated".
The council says that that money will be recouped now that a new contract has been agreed.
But campaigner Paul Dainton, who has strongly opposed Welbeck since the project first began in 1998, called the revelation "an absolute scandal".
He said: "If you or I didn’t pay our council tax, or owed the council £1m, we’d be taken to court and sued.
"Why on earth would the council waive a £1m payment when the firm has been making massive profits from the land?
"It beggars belief.
"Either the council needs to give an explanation, or there needs to be a public inquiry into this."
The company has a deal to stay on the site, which is located just west of the River Calder, until 2033. Last year, however, they insisted that the park would be completed before then, after sufficient amounts of waste had been tipped to form the foundations.
Glynn Humphries, service director for environment and property, said: "The council has had a lease agreement with Welbeck Waste Management (WWML) since 1998 that finishes in 2033, which includes a monitoring period of the land after landfill operations have ceased. This has not changed.
"Since the contract started less waste has been entering landfill, thanks to changing attitudes towards recycling. This has resulted in a renegotiation of our operational contract with WWML.
"During the renegotiation period a debt was accrued, which was rightly indicated in our statement of accounts, however, in real terms the new operational contract we have now entered with WWML will see recovery of this debt over the coming months."
FCC declined to comment.
Local Democracy Reporting Service