A project for children with severe learning difficulties started before a contract was signed with the council.

NCH Action for Children told a Brighton and Hove City Council scrutiny panel this was not usual practice.

But Veronica Locke, line manager for the Palmeira Project in Hove, explained the need had been urgent because a child with challenging behaviour had nowhere to go.

NCH was chosen to run the project in Palmeira Avenue for the council.

Assistant director Deborah Lightfoot said the decision had to be viewed in the context of NCH's relationship with the council.

She said: "We had a trusting partnership. We were trying to assist the council and the child. It was really urgent for this young person."

Trouble arose when the annual budget for the project rose from £357,000 to £584,000 within two years and it was decided it should be brought to a close.

However, after a High Court challenge from parents, an agreement was made to keep it open.

The council decided to set up the panel to investigate what went wrong and see if lessons could be learnt.

It will hold further meetings until March before drawing up a report.