THANET council was forced to repay hundreds of thousands of pounds to central government after it failed to meet conditions for grants, new documents released this week show.

A report published on Wednesday exposes serious flaws in the council's managing of large sums of cash, including £250,000 which was to be spent helping Thanet Innovation Centre attract new businesses.

A report for the Governance and Audit Committee, which monitors how the council spends its money, has been made public for the first time this week. It reveals that between 2000 and 2006 the council received £5,575,715 in government grants, but has since been forced to repay £603,340.

The report also highlights large sums of taxpayers' cash, intended to boost tourism and to spruce up businesses and buildings, which vanished or was misspent and cannot now be recovered.

Tens of thousands of pounds was given to hoteliers to improve their businesses and attract more tourists only for the hotels to close, be demolished or converted into flats.

The extensive list specifically mentions the Thanet Innovation Centre, which shares a site with the Broadstairs campus of Canterbury Christ Church University.

The report says: "This was the council's single biggest reclaim and the partial repayment related to the authority not fulfilling all of the grant conditions and failing to notify the Government of the South East (GOSE) of changes in the management approach following the original grant letter, that were considered substantial changes by GOSE".

The reports says that instead of filling the business centre with innovative companies, it used space for companies that "are not innovative start-up businesses" and its own staff. The report also said the council had not maintained records of jobs created by the grant.

A business owner inside the centre said: "The council could have spent that money on improving the centre which would attract new businesses in.

"There is no air conditioning and it gets hot in here in the summer. The carpets are shabby, the parking here is poor and visitors sometimes have to park over the road, which is not good at all for business. This building is 10 years old and it needs updating. What a waste of money."

Vice chairman of the Governance and Audit Committee, Councillor Peter Campbell, vowed to get to the bottom of how the money was so badly mismanaged at a meeting later this month.

He said: "This information has been unavailable to the public for a long time. I want to know why this money has been returned when it could have been put to good use"

The report says that since the audit which uncovered the blunders, the council has changed its procedures and employed someone to oversee the process of grant management.

A spokesman said that many of the officers who would have been involved in running the grants programmes had since left the council.

Mr Campbell added: "I want to know what happened to this money. My assumption is that the money repaid to the European Development Fund came from Thanet council's general fund and ultimately the taxpayer."

A council spokesman said: "This is an issue from a number of years ago and when the problem emerged, the council dealt with it. An action plan was put in place as far back as 2008 with measures introduced to ensure that a similar situation will not arise again. We have had an External Funding Protocol in place since 2009 and a dedicated External Funding Officer ensures this is adhered to.

"There were many issues regarding monitoring of ERDF grants throughout the whole of the country.

"In some areas, much higher levels of funding were clawed back, even leading to a suspension of the programme. We have never had that situation in Thanet. We worked with the Government Office for the South East (GOSE), came to an agreement about how to go forward and this was implemented."