Doncaster is home to the famous St Leger meeting

Its plea that it was not bound by the contract with Racing UK was "totally implausible", the court said.

The council argued the deal had been signed by the racecourse management company without its authority.

It must now honour the contract which runs until 2007 and pay Racing UK's costs, estimated at more than �250,000.

Ruling 'inevitable'

On top of that, Doncaster will have to pay the bills for its own legal team.

Lord Justice Buxton, sitting with Lord Justice Wall and Sir Martin Nourse, upheld as "inevitable" a High Court judge's ruling last year that the council was bound by the terms of the Racing UK deal.

The March 2004 deal was signed by John Sanderson - chief executive of the course's then managers, Doncaster Racecourse Ltd (DRL) - with the council's "ostensible authority", the judge ruled.

Mr Sanderson was "the human face put forward by the council" for Racing UK to deal with and the company was entitled to assume he had Doncaster's say-so to grant exclusive media rights.

And the judge rejected the council's plea that Racing UK made a "mistake" in believing Mr Sanderson was entitled to deal on behalf of Doncaster when only the council itself could grant such wide-ranging rights.

'Common knowledge'

It was "common knowledge" that the council owned the racecourse and the judge remarked: "Those who dealt with Doncaster Racecourse, dealt with Mr Sanderson".

Mr Justice Tugendhat, who decided the case against the council after a five-day High Court hearing last year, had given "comprehensive and cogent" reasons for his decision which was made "on principles that are uncontestable".

The High Court was told by the council's barrister, Richard Salter QC, that the case was important to the council as it was in talks with Arena, a rival of Racing UK, to redevelop the course.

He said Racing UK's strangle-hold over broadcasting from Doncaster was putting the progress of those negotiations in jeopardy.