Shropshire Council was offered the chance to pay off Alun Griffiths Contractors in July 2010 following a dispute between the two parties over the extra cost of Shrewsbury's Quantum Leap sculpture, which had originally been expected to cost just £200,000.
But the council turned down the potential deal from the contractors after being advised by construction claims experts Hill International it was likely to win any adjudication on who should pay the extra costs after problems with its construction resulted in delays and additional expenses.
However, a ruling by an independent adjudicator in July 2011 ruled the original design specification for the Mardol Quay sculpture – dubbed The Slinky and built to mark the 200th anniversary of the birth of the town's most famous son Charles Darwin in 2009 - was at fault.
It meant Shropshire Council, which inherited the project from the now disbanded Shrewsbury & Atcham Borough Council in 2009, was ordered to pay over £860,000 to Alun Griffiths.
The council also ended up paying Hill International more than £100,000 for its advice, as well as a further £6,000 towards the adjudicator's costs.
The total cost of the project ended up being just over £1 million, when a further £39,000 of additional costs was added to the final bill. The figures have been revealed in a report into the fiasco by the Audit Commission.
Councillor Steve Charmley, the council's cabinet member responsible for the sculpture, said: "We had the opportunity for the £600,000 settlement but all the advice we had said we should be winning this case and not end up in the position we have done."
No-one from Hill International or Alun Griffiths were available for comment today.
Meanwhile, a councillor today vowed that the circumstances that led to the Quantum Leap fiasco will never happen again.
Councillor Steve Charmley, Shropshire Council's cabinet member responsible for the sculpture, said problems were caused by a unique set of circumstances in which the council inherited the project from the now defunct Shrewsbury & Atcham Borough Council.
"There won't be another Quantum Leap," he said. "In the financial climate we are in, there is no way we are going to be building a concrete structure on the river bank in the future."
He said Shropshire Council had strong processes in place for dealing with its capital projects, such as setting a minimum level of indemnity insurance of £1 million. "This was a transitional project that has caused a problem," he said.
George Candler, area director for Shropshire Council, said all of the members of SABC's project team for Quantum Leap had all left the council.
He said some left in 2009 when SABC was disbanded and others had gone since taking up posts with Shropshire Council.
All of the costs from the project came out of last year's capital budget.
Mr Candler said no other council scheme had to be cancelled or stopped because of the bill.