The council will now be taking further action to try and recover the money, which was a bond that could cover environmental restitution of an “emplacement area” on council land within the mine site, if necessary.

The development was approved by council in 1989. The area has now accumulated about 200,000 tonnes of oversized coal.

One councillor, Greg Petty, said the economic loss from interest not earned over the 27 years of the debt could approach $1 million, depending on interest rates.

“Through 27 years of different staff and general managers, councillors and even three years of administrators, this issue has not been acted upon,” Cr Petty said.

“This is a massive internal control failure – how many others are there?”

WCC had been “working with” the miner for more than a year to get the debt paid, but assurances had not been met. Council said it the matter had now been referred to solicitors.

Despite this, a Wollongong Coal spokesman on Friday said: “Wollongong Coal have been co-operating with (council) to rectify these outstanding conditions”.

The Mercury asked several times how council had allowed this condition of approval to be non-compliant for so long. But no answer was forthcoming. A council spokeswoman would say only that WCC was learning and improving.

“Council has been working proactively to better understand the history, address outstanding issues and ensure compliance moving forward,” she said.

“Council is a learning organisation and we continually strive to improve our practices and ensure more robust processes for compliance and enforcement.”

Council was not aware of any other outstanding bonds.

The Mercury raised the issue last November, and general manager David Farmer said council had been “working with” the miner for a year over the payment.