Forest lease the City Ground from the city council

The council was forced to come up with �209,000 to meet an interest payment as it guaranteed the loan when it was taken out by the club in 1994.

But city council leader Jon Collins expects Forest to pay back every penny.

"We're disappointed that Forest seem to have decided not to honour their debts and to shift this responsibility to city council tax payers," said Collins.

"We understood the club's directors had put to one side the money to meet this repayment, and we fully expected them to make payment a priority.

"We do recognise the importance of the club to the city, and that is why we have offered consistent support and encouraged the City Ground's development over the years."

Forest took out the �4.3m loan to help develop a new Trent End stand and turn the City Ground into an all-seater stadium for the Euro 96 finals.

Discussions

The council is the freeholder of the ground and leases it to the club.

Having defaulted on their agreement with the council, Forest are now liable to surrender the lease of the City Ground and any option to renew or extend it.

The council said in a statement, however, that "this would not necessarily prevent the club from continuing to play at the ground".

The statement continued: "Discussions have been taking place with the club over restructuring its finances with a view to helping it to turn the ground into a 40,000-seat stadium.

"The City Council is keen to do all it legally can to help achieve this, but has been unable to accept the proposals put forward by the club."