Oxford traders have long claimed that the city council, far from helping them through this tricky period of falling footfall in retail centres, has actually been making the situation worse by increasing rents.

Now tenants in Oxford Covered Market reckon they can prove that to be the case, after one of them took the council to arbitration over a rent hike — and the official arbitrator decided a fair rent for his unit was actually less than the tenant had offered in the first place.

And this expensive fiasco, in which the Covered Market Traders Association are backing a claim for the council to also pay the arbitrator’s costs out of public funds, has developed in the week in which a survey from business leaders’ group Oxfordshire Business First (formerly the Oxfordshire Economic Partnership) has found that empty properties are causing a “blight” on town centres across the county and are an obstacle to growth.

Many members feel “that local authorities, some of which are landlords of town centre properties, could do more to keep town centres thriving and bustling”.

In the case of the Covered Market, the council demanded a 60 per cent rent hike on one of the two units let to cafe Mortons — from £15,000 a year to £24,000.

Proprietor Craig Muir offered £17,500 in a bid to avoid the trouble and expense (at least £5,000 on his side alone) of going to arbitration — which he says the council then ignored. Until, that is, just before arbitration when the council suggested £18,000 — which Mortons, backed by the Covered Market Traders Association (CMTA), turned down.

On June 2, Mr Muir and the CMTA learned that the arbitrator’s decision was available and chairman of the CMTA, Chris Farran, of the Cake Shop, paid the £2,000 bill for arbitration immediately.

But the council failed to pay its share of the bill as quickly, delaying publication of the decision until last week.

And when the decision finally arrived, it revealed a rent of just £16,800 for the unit, well below the sum Mortons had offered — and way below the £24,000 that the council had originally demanded.

Mr Farran said: “We don’t want to crow but we are pleased that common sense seems to have prevailed, and we now hope the council will be more constructive over future negotiations — and a rent review is due for many market units in September.

“We think the council has been unrealistic in its expectations.”

He added that back in 2008 the council had demanded rent increases of up to 180 per cent and traders had been faced with a deluge of costs for arbitration — which had resulted in increases across the board very much lower than what the council had originally demanded.

He explained the central point is that the council is required by law to obtain the market rent for its properties — but the ongoing argument is about exactly what a market rent is.

Colin Cook, Labour Oxford city councillor with special responsibilty for city development, said: “At a time when the city council is under considerable financial pressure as a result of central government cuts, it is only reasonable that it should seek to achieve the best return it can from assets such as the Covered Market.

“We accept the rent figure set by the independent arbitrator as being the market rent, for that use, in that unit.” He added that the delay in paying the arbitrator’s bill was down to a simple administrative error.

But traders still point, with disappointment, to perhaps the most prominent unit in the entire Covered Market, one which was occupied for many decades by Palms delicatessen — which has been standing empty for the past 15 months.

Mr Farran added: “An offer from an existing market tenant to take the lease at the rent paid by Palms, for the same use and to pay the outstanding arrears, was rejected by the council.”

Now, 15 months on, he contends that the council, by holding out for the £40,000 rent it is now asking, has lost out — leaving itself open to accusations of complacency.

Mr Cook responded: “There are nearly 60 shops operating in the Covered Market and it is only as a result of the city council’s commitment to maintaining the character of the market, the balance of uses, and our policy of excluding national retail chains, that has delayed our letting of this single unit to an appropriate tenant at an acceptable rent.

“The city council has not compromised on these principles because it is committed to maintaining the long-term viability of the Covered Market for the benefit of city residents and visitors alike.

“I remain very far from complacent on this issue but, given the current economic climate, I would beg to suggest an occupancy rate of 98 per cent would be the envy of many retail centres in this country.”

So what are the lessons to be learned from this saga? Is the city council, one of Oxford’s main commercial landlords, exacerbating an already difficult economic period for traders through greedy rent demands?

Graham Jones, spokesman for city traders’ pressure group ROX, has no doubts.

He said: “Not only are they greedy but they are ineffectually greedy.”

Here’s hoping, come September’s rent review, that a less expensive and less confrontational mode of operations will prevail in these difficult times.