Area committees may have to cough up thousands of pounds if they refuse planning applications which are later won on appeal.

Oxford City Council is fed up with having to pay out appeal costs because area committees have gone against the advice of planning officers and refused applications.

Now city council leader Alex Hollingsworth has suggested the committees should have to foot the bill.

The move comes after the authority was ordered to pay £5,000 when an application to turn two houses of multiple occupation into flats and bedsits was approved on appeal.

Previously the application, for 25 and 27 Fairacres Road, had been turned down by the East Area Parliament despite being recommended for approval by planning officers.

After pressure from local residents, the parliament said more flats would destroy the community spirit of the area.

But a Government planning inspector said the views of local residents did not justify disregarding the advice of planning officers.

The £5,037.50 appeal costs will be borne by the city council from reserve funds, but in future area committees may have to fork out themselves.

Mr Hollingsworth said: "We need to have a complete reassessment of the situation. If local area committees turn down a planning application and end up with costs, it's not very fair on the rest of the city to pay up."

Each of the city's six area committees, launched in November 2001, has a "no-strings" budget of about £100,000.

Liberal Democrat city councillor Alan Armitage said: "You can't put the onus on the area committee unless they have adequate budgets to deal with it - and they don't."

City council deputy leader, Bill Baker, said: "Area committees should have a budget to put their money where their mouth is."