SHAREHOLDERS of Worcester City FC were left stunned when it was revealed at the club’s annual general meeting that it had to fork out £600,000 to be released from a contract to build a new stadium off Nunnery Way.

Back in December 2013, bosses at Worcester City agreed terms with developer St Modwen to scrap the deal, which saved them from being plunged into administration.

However, new figures obtained by your Worcester News at City’s AGM on Thursday revealed the club had to pay developer St Modwen £500,000, plus £100,000 in VAT, to escape the deal in January 2015.

Chairman Anthony Hampson said they managed to strike a deal with tax inspectors to bring the Corporation Tax bill down from £400,000 to £179,016.

“We had to take it on the chin, we had to pay the £500,000 plus the VAT, but the capital gains tax we have managed to get reduced to a manageable figure,” he said.

“That is business and that is how it goes.

“We were under a confidentiality agreement so we had to keep quiet. That’s why it has now come out, it is all out in the open and they all accept it. “It is better to do that and keep the club going otherwise the club would have been scuppered.”

The announcement of the loss left a “stony silence” at the packed out Gheluvelt Suite, Whitehouse Hotel, according to former director Rich Widdowson.

“Why are a company which have got so much interest in the city taking compensation out of the football club?” he said.

“It is a disgrace and they have got the land as well.”

Another supporter, who did not want to be named, said: “I cannot believe that we have paid half a million pound to get out of a contract plus the VAT.

“Everything was reported as being rosy three years ago.”

City received £3.1million for the sale of St George’s Lane, but they have now been left with a balance of only about £650,000 in the club account.

The club is also expected to lose a further £120,000 over the financial year ending May 2016.

Graham Brixey, of Rainbow Hill, who has been a supporter since 1961, said he was shocked by the figures and felt the club, which is currently paying rent to Kidderminster Harriers to play at Aggborough, was on track to going bust.

“We are just about viable at the moment, but we are haemorrhaging money, so in three or four seasons we will be bust,” he added.

A spokeswoman from St Modwen said: “Further to enquiries relating to details of Worcester City Football Club’s release from the Nunnery Way contract, which was discussed at its AGM on 28 January 2016, we refer back to our joint statement, issued with the club’s chairman, Anthony Hampson, in December 2013.

“The terms of the agreement and the deed of release remain confidential and subject to a non-disclosure agreement.

“We are therefore unable to make any further comment.”