A source close to the case said it is
likely her money is held in trusts in Israel and the United States and it is nearly impossible to prove she has the cash.
The council's attempts to recover the money will cost millions in legal fees and the council could be better off accepting a lesser payment, said the source.
The council's director of legal services Colin Wilson said: 'The council has taken prompt legal action to secure recovery of the surcharge and is pressing ahead.'
The House of Lords ruled against Dame Shirley in December (LGC, 21 December 2001) when district auditor John Magill appealed to the Lords to force her to recompense the council.
Mr Wilson demanded payment within 14 days to cover losses resulting from the homes-for-votes scandal.