THE Audit Commission, the public spending watchdog, appears to have told Oxford City Council it has so far failed to prove it got the highest price for land on which the Kassam Stadium was built.

The Oxford Times has obtained a letter showing a dispute has arisen between the Town Hall and district auditor Andy Burns.

Mr Burns appears to have claimed that the authority failed in its legal duty by not getting the best price for the ten-acre plot at Minchery Farm when selling it to Firoz Kassam for £1.294m in 2001.

Mr Kassam, the former chairman of Oxford United Football Club, still owns the freehold on the land. There is no suggestion he acted improperly during the sale.

However, the city council's lawyer, Lindsay Cane, has asked Mr Burns to reconsider his preliminary findings on the sale.

Mr Cane stated that the authority acted properly during a "complex and fast-moving" process.

District auditor Mr Burns is still gathering evidence before publishing his findings next month.

However, The Oxford Times has been passed a leaked copy of an eight-page letter in which city council lawyer Mr Cane told Mr Burns that the city council had "repeatedly demonstrated" it got the best price.

The letter, which was passed to us by a council source, would also appear to suggest that Mr Burns had concerns that councillors were not fully appraised of all the financial implications of the deal and that the authority failed to get a valuation of the land in the condition in which it was sold.

In his letter to the district auditor, Mr Cane said: "We are disappointed the conclusions you have reached seem to be materially at variance with our own.

"The council remains of the view that in disposing of its land at Minchery Farm it did in fact obtain the best consideration reasonably obtainable and, by doing so, complied with its obligations."

An Audit Commission source told The Oxford Times the city council could yet face a High Court hearing over the land sale and "a possible outcome" was that officers could be sacked.

However, many officers who worked at the Town Hall at the time no longer do so.

The disputed land at Minchery Farm was designated for open leisure use when originally bought by Oxford City Council from Thames Water in the late 1980s.

Thames Water claimed the sale of the land for development contravened a covenant.

It sued the city council and won.

Negotiations between Firoz Kassam and the city council at the time leading up to the land sale were overshadowed by a realistic fear that Oxford United Football Club would go out of business.

Confidential briefings to councillors in the lead-up to the sale read: "In view of the perilous state of club finances it now seems unlikely that Oxford United can continue unless Mr Kassam remains involved and buys the club."

A spokesman for Oxford City Council added: "This letter forms part of the ongoing discussions between the council and the district auditor in regard to the Audit Commission's concerns over the sale of the land at Minchery Farm and the council's response to those concerns.

"Until the final report is issued we will not be commenting further."