ALMOST all of the £11.9 million proceeds from the sale of Minehead's Vulcan Road car park has been gobbled up paying off West Somerset Council's debts.

Councillors agreed on Wednesday to repay two outstanding loans totalling £6.5 million, coupled with a £1.484 million penalty for paying the debts off early.

On top of that, the authority used £2.63 million of the Vulcan Road cash to pay off "disposal costs" incurred by the council as a result of the sale of the site to supermarket giant Morrisons.

Finance chief Graham Carne said settling the loans would save the council around £236,000 each year.

"I don't think we will ever be in this position again to clear the debts and the premium," Mr Carne told Wednesday's full council meeting.

Cllr Doug Ross said it was "frustrating" to be penalised for giving a company back its money ahead of schedule but understood the council had no choice but to pay off its debts.

Cllr Keith Ross added: "It's because we've spent the money already that we have the loans and now have to pay it back."

The loans had been due to run until 2043 and 2026.

They were among a total of £12.5 million loans taken out by the council in recent years just to keep it afloat after it plunged more than £1 million into the red.

Bosses have already put an official freeze on recruitment, banned all non-essential revenue spending and put the brakes on yet-to-be-started capital schemes.

Councillors are also hoping for the authority to be treated as a special case by central Government and are planning to use the so-called 'Roots Report' to lobby Westminster for additional funding.

Troubleshooter Bill Roots, the former chief executive of Westminster City Council, concluded the authority was "almost unique" due to its small population, rural character and low Council Tax base.

He was drafted in by the council to scrutinise its finances and found the authority had been run in an "imprudent fashion" in the past, leaving it a precarious financial position and with low staffing levels which could have to be cut further.