THE University of Worcester has been left celebrating after the Government decided to refund £1.8 million in taxes on The Hive.

The city's gold-cladded £60 million building has been handed back its VAT costs after a long-running dispute involving fierce lobbying with the Treasury and ministers.

For the last four years Worcester MP Robin Walker has been arguing that The Hive should be treated like any public building and be spared a VAT bill on its construction costs.

The case had been taken up with successive ministers and more recently Education Secretary Nicky Morgan, who came to Worcester to see it last year.

But the rules around the treatment of shared services are complex and until now it looked as if the university would have to bear the cost.

The cash came out of its reserves but HMRC has now decided that no bill should be paid, boosting its coffers.

Mr Walker has hailed it as a "victory for Worcester and "common sense".

He said: "I am delighted to see this decision.

"Common sense has prevailed and the case that I and the university have been making over a number of years has been accepted.

"The Hive is one of the finest public libraries not just in the country, but in Europe.

"Given the huge benefit to the public it was always questionable whether VAT should have been payable on its construction costs - but my main concern was that making it so would discourage other people from taking this approach.

"This is a victory for Worcester, a win for libraries in general, a boost for our university and a major victory for the practice of saving money and delivering world class facilities efficiently and sustainably facilities through sharing."

A spokesman for the university said: "The university is pleased to have received this refund from HMRC and we are grateful for Robin Walker's assistance in resolving this matter.

"The Hive is a wonderful multi award-winning facility for all in Worcestershire."

The building was opened by Her Majesty the Queen in 2012 and is now one of the best known and most popular libraries in the UK.

It is also a joint student-public library, making it unique across the country.

The refund comes after we exclusively revealed in December how the university had yet to pay any business rates on its sports arena in Hylton Road.

A national body called the Valuation Office Agency had yet to assess the building despite it being open more than two-and-a-half years.

* No business rates paid on the University Arena - see our story HERE.