Dartmouth Town Council's budget black hole could suddenly be a massive TEN times greater than expected with the news that work could start as soon as next year on the town's £2.5m swimming pool.

Councillors were due to meet yesterday to look at finding just £26,000 to balance the books for the coming financial year after discovering the VAT savings they were hoping for might not show up.

But now council could be faced with finding up to £250,000 – the money that was pledged two years ago towards the cost of building the major swimming pool project.

The council does not have a huge pot of cash in its savings anymore after virtually emptying its bank account to help pay the £400,000 bill for the market revamp.

When the council's finance committee met a fortnight ago the councillors agreed not to include any of the swimming pool cash in the coming year's budget.

Now they could be faced with changing their minds after hearing that the pool project is all set to go ahead next year and take a year to 18 months to complete.

Dartmouth and District Indoor Pool Trust chairman Sir Geoffrey Newman said the trust will be looking to make 'staged payments' for the project as the work begins, which will mean spending at least some of the promised cash – £1.5m from Devon County Council, £400,000 from South Hams Council and up to £250,000 from the town council – in the next financial year.

Town council finance committee chairman Francis Hawke said before yesterday's meeting: 'All I can say at the moment is that it is bad timing for us because of our current financial situation. We have a resolution that we give up to a certain figure and we will have to sit down and resolve how we meet our commitments.'

Deputy mayor Dave Cawley, who protested earlier this month at the finance committee decision not to include any pool money in next year's budget, said he believed the town should be looking at putting aside £25,000 or £50,000 a year to cover the cash pledged to the pool.

'The town council has a lot of money it could spend. We could defer the maintenance on some of the buildings like we have done to save up for the work on the market,' he said.

The town council decided in 2009 to agree to consider contributing from £100,000 and up to £250,000 on the pool project.

The finance committee had been about to recommend the council hike the local council tax bill by five per cent to cover a £137,000 budget which included spending £25,000 on clearing silt from the boat float, another £25,000 on repairing the market walls and spending £60,000 on carrying out major repairs to the council-owned flat at 6a The Butterwalk – but did not include any cash for the pool.

But the recommendation had to be shelved at the last minute after it was discovered that the £26,000 in VAT savings the council had expected to make by handing the running of the community cafe over to the Dartmouth Caring charity may not now happen because the charity had not even been formally asked to take it on.