Corby Borough Council faces a bill of up to £13m after the High Court ruled its regeneration work on the site of a former steelworks made it liable for birth defects in 16 young people.
The district’s current legal bill is £1.9m, while that of the complainants has reached £4.7m.
Corby predicts compensation will total £3m and it will face more legal costs as individual claims are settled.
A full council meeting will be held this month to determine whether the council will appeal the ruling.
Corby’s chief executive Chris Mallender insisted the council had no regrets about pursuing the case and he hoped the town’s growth would result in extra tax income to fund the cost of the legal bill and compensation.
He said that if the council had believed there was a causal link between the reclamation of the former works site and the deformities, it would have apologised and offered compensation.
“We don’t regret fighting it,”he said. “We believe strongly that we weren’t responsible and we felt we had a duty to defend it.”
Although he expressed sympathy for the families in question, he said that more families could have sued the council had it not fought the case.
Commentators asked why Corby did not insure itself against such claims.
Mr Mallender said it was “difficult for me to answer that retrospectively,” although he insisted councils often expected to cover claims from their revenue accounts.
Asked about the financial implact, he said: “We’ll cut any cuts in services or job losses to an absolute minimum.”
Danielle Holliday, of Collins Solicitors, acting for the families, predicted to LGC that total legal costs in the case would amount to £10m.
“The council, having lost this, has incurred a huge amount of costs that weren’t necessary. They could have admitted liability on negligence and fought each one on compensation level alone,” she said.
Ms Holliday said the firm was aware of “tens” of other families who hoped to join the litigation.