Shrewsbury Town Council recently apologised "unreservedly" over the 2017 sale of part of Greenfields Recreation Ground after an independent inquiry found the site had been designated for community use.
Leaders have since met with CSE Developments - the company which bought the land for £550,000 to build 15 homes - to begin discussions on how it can be returned.
Mistakes made are likely to prove costly, and a possible solution previously mooted was whether the council could hand over another patch of land it owns to the developer as a way of avoiding paying out hundreds of thousands of pounds.
However, during a meeting in which Greenfields Community Group campaigners were given an update on the progress, town council leader Alan Mosley said it was an avenue that is not being looked at.
"After the discussions we've had, that land swap suggestion is not currently being pursued," he said.
Councillor Mosley said the campaign group would be given an update closer to the next full council meeting in September if a date can be arranged.
"We are taking it extremely seriously," he said.
The council's apology earlier this month came as a surprise to campaigners from Greenfields Community Group, who have been battling to save the land for several years and earned a date at the Supreme Court this December.
Dr Peter Day, who is spearheading the challenge, said the council is now "making the right noises" over the issue, after several councillors spoke up to endorse the collective apology at the extraordinary general meeting at Theatre Severn on June 8.
The council's task is now to figure out how the land can be returned to public ownership and made available as a public amenity, establish a process of mediation and seek an appropriate process for dealing with inadequacies in its polices.
The issue will next be discussed in public at a full council meeting on September 5.