A businessman has acknowledged he personally received a "substantial part" of the £130million invested by a heavily indebted Essex council for solar energy projects.
Thurrock Council had transferred the funds to companies controlled by Liam Kavanagh, who has now confirmed in High Court documents that much of this money ended up in his own hands.
Records submitted to the court reveal a spending spree on high-value assets following the transfers, with Kavanagh, acquiring a yacht valued at £14 million, and a private aircraft costing £9million.
He also used the ill possessed money to purchase a Spanish villa worth £3million and an £800,000 sports car.
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The admissions emerged through documents obtained by the Bureau of Investigative Journalism.
Thurrock Council declared itself effectively bankrupt in 2022, burdened by approximately £1.5billion in debt, and has depended on central government assistance ever since.
In his High Court defence, Kavanagh stated he had "honestly believed" the transferred funds were his to use freely.
This position represents a notable departure from his previous stance, when he denied that public investment money had financed his personal expenditure.
Thurrock Council declared itself effectively bankrupt in 2022, burdened by approximately £1.5 billion in debt
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The legal battle centres on three separate payments totalling £130million, which followed an initial £268million transaction to acquire solar installations known as the Miramar portfolio.
The council maintains these additional sums were subject to identical conditions as the original agreement, intended exclusively for solar development.
Kavanagh disputes this interpretation, claiming conversations with the then finance director in 2018 led him to understand the payments differently.
He also contends that certain transfers occurred without formal documentation setting out their terms.
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The investment approach originated under the then-Conservative council as a response to reduced funding during the austerity era.
Thurrock's strategy involved borrowing at low rates from the Treasury, and channelling funds into renewable energy assets expected to deliver superior returns.
At the scheme's height, the authority had committed roughly £655million to ventures connected to Kavanagh, encompassing more than 50 solar installations.
Earlier civil proceedings disclosed that numerous solar farms tied to these bonds suffered from significant problems, described in court papers as "blighted by defects" and "flawed assets".
Kavanagh was reportedly aware of these issues when the transactions took place.
Meanwhile, he had already profited handsomely from his dealings with Thurrock before the disputed £130million payments.
The Times reported in 2020 that he received approximately £5million in commission linked to one of the solar transactions.
Sean Clark, the finance director who oversaw these investments, was subsequently investigated by the Financial Reporting Council, which concluded he had fallen "significantly short of the required standards in a number of respects", and banned him from ACCA membership for five years.
The collapse has left lasting financial damage despite the subsequent sale of solar assets, which recovered only a portion of the outstanding debt.
Ministers have confirmed that additional public funding will be necessary to restore the council's finances, with further support anticipated in coming years.
Steve Reed, the local government minister, informed parliament this year that government intervention was essential to shield taxpayers from mounting costs associated with the authority's borrowing.
Additional fears come with the looming local government reorganisation, where neighbouring Essex councils that merge with Thurrock under the pending five unitary authority system would take on the debt amid the merge.