The local government ombudsman said the council wrongly decided to permit the installation of the plant in 1996 when it should have gone through a full planning permission process.
Ombudsman Jerry White said the resulting injustice was 'very substantial indeed. The complainants have suffered two and a half years of avoidable noise and dust. They have also had to live with the prospect that their homes have been devalued'.
He reached a finding of maladministration causing injustice and recommended a total of£11,500 for four households, plus an ongoing sum of£1,000 for three households for each year they continue to suffer dust and noise nuisance.
Dudley said it wanted to concentrate on finding a solution with the company, and the ombudsman's report was unlikely to go to the council before June.