Caerphilly County Borough Council paid a developer nearly £65,000 after rejecting a planning application, despite councillors being urged to approve the plans on four separate occasions.
Councillors dismissed plans for 45 homes on the former Axiom factory car park in Newbridge but, once the applicant appealed, could provide no evidence to support their decision.
The planning committee raised security, safety and noise concerns while also fearing the electronics manufacturer, which sold the land to the developer, would relocate if the development was allowed.
But a planning inspector said the decision, which was overruled in 2016, was contrary to planning officer advice provided at four successive planning committee meetings.
Figures obtained through a Freedom of Information request reveal the £64,470 costs was the highest sum spent by Gwent authorities defending failed planning appeals in the past three years.
Cllr Mike Adams, chair of the council’s planning committee, said members were right to remain committed to their views regarding the Axiom development.
The outgoing mayor also expressed frustration that building work has yet to begin at the site, with developers expected to start construction within five years of receiving planning permission.
“I don’t think the committee will regret the fact that they’ve taken a position and have committed to it, and members have shown an awful lot of confidence in our officers,” he said.
“They are aware that if we go against recommendations that there are likely to be relative cost complications.”
But Cllr Adams conceded that the sum paid to the developer was “significant” and said he would prefer if the money stayed within the council “amid ongoing austerity”.
A council spokeswoman said large one-off costs were “rare”, adding that while the sum was funded through revenue budgets, it would have no bearing on ongoing cutbacks to public services.
In total, developers had their appeals upheld by planning inspectors 75 times across the five regional authorities in Gwent between 2016/17 and 2018/19.