In an 'exceptional' case, - through its deputy leader Anthony Parkyn - the council went to the high court to try to avert the consequences of its error.
The council challenged the legality of four of its own decisions, granting planning consent for a large non-food retail development at the Victoria Business Park, Roche, beside the A30 trunk road.
The decisions were later declared 'grossly wrong' by an environment department inspector who said the development would harm 'the vitality and viability' of the nearby town centres of Bodmin, St Austell, Newquay and Truro.
Council lawyers argued the original grants of planning consent had themselves been unlawful and Land and Property should not be compensated for development rights which they should never have been granted in the first place.
But deputy high court judge George Bartlett QC rejected the council's challenge with the result that some of the burden of compensating Land and Property may now fall on local tax-payers.
The judge said the developers hoped the compensation now due to them would be 'substantial', but the sums involved had yet to be calculated.
The council is insured up to£500,000 and it is uncertain how much more, if anything, will have to come out of the pockets of Restormel tax-payers.
Mr Parkyn, whose case was financially backed by the council, and another councillor, William Corbett, who went to court in his own right, are now facing heavy legal costs bills.
Although Judge Bartlett refused them permission to appeal against his decision, the councillors now have 14 days in which to lodge an application for leave to appeal to the court of appeal.
The court heard planning permission for 125,000 square feet of non-retail space on the 20-hectare business park was first granted to the site's then owners in 1990.
Further planning permissions for non-food retail development were granted in 1993, 1994 and May 1997.
But the environment department intervened, saying the decisions appeared to be contrary to government planning policy which discourages large-scale out-of-town retail developments which might harm existing shopping centres.
A public local inquiry was held in May last year and the inspector concluded that the 1993, 1994 and 1997 planning permissions all conflicted with national policy and were 'grossly wrong'.
The inspector said the proposed development would harm the vitality and viability of neighbouring shopping centres and undermine the efforts of local town centres to attract investment.
The development, she said, would also be detrimental to thefree flow of traffic and would undermine the aims of the development plan and national policy to focus development on existing town centres.
The environment secretary accepted the inspector's recommendations and the council was, in March this year, forced the modify the 1997 planning consent, striking out the non-food retail development.
Christopher Katkowski QC, representing Mr Parkyn, argued in court that the three planning permissions had all been unlawfully granted and asked Judge Bartlett to overturn them.
Had his arguments succeeded, the council would have escaped having to compensate Land and Property for the modification it was forced to make to its planning permission.
Judge Bartlett accepted that the council had failed to have regard to the terms of the development plan. It had also failed to refer the planning applications for consideration by the secretary of state, as it was obliged to do.
But the judge ruled it 'would not be just' to overturn the planning permissions and thus remove Land and Property's compensation rights.
Land and Property, he added, had acquired the land for£450,000, also incurring substantial other expenses in reliance on the apparently lawful planning permissions.
'The faults were purely those of the council' and Land and Property were entirely blameless, he told the court.
The council had presented no evidence as to the size of the potential burden which might fall on local tax-payers if compensation had to be paid, 'or indeed to show that there would be any significant burden at all'.
'The risk that compensation will be substantial is unquantifiable, and it is also impossible, on the evidence, to form any assessment of the possible impact on council tax payers,' he observed.
The delay in the council bringing the case to court had been 'very substantial' - the latest decision challenged was made more than three years ago, the judge added.
Right up until the time that the environment secretary forced it to modify the 1997 planning consent, Restormel had insisted the permission had been granted lawfully and on its merits.
The council had also refused an invitation from the secretary of state to modify the planning permission before the public inquiry, the judge said.
He concluded: 'On three occasions, when faced with the prospect of modification orders being made, they resolved not to seek judicial review.
'Taking into account all these matters I am satisfied that it would not be just to grant relief. The applications are refused.'
Strand News Service