Brighton and Hove Albion has warned it faces financial ruin after Lewes District Council decided to press on with its High Court action against Falmer stadium.

The council's Cabinet voted unanimously in a behind-closed-doors meeting last night to decline an offer from the Government to quash the planning permission.

New Secretary of State Ruth Kelly offered to reconsider the application after John Prescott admitted making a mistake in his original consent letter last October.

The council said the Government refused to agree to its ultimatum that all 16 points in its legal challenge would be dealt with by Ms Kelly.

Albion bosses warned it would lead to more frustrating delays to the long-running £50 million project, which has already been knocked a year behind schedule by the council's opposition.

Chief executive Martin Perry said: "We are utterly frustrated the council has placed another obstacle in the way to delay this stadium as much as possible despite the impact it is having on the club.

"The council has demonstrated quite clearly that, contrary to what it says, it is only interested in trying to defeat this stadium by delay.

"It was offered a way out but has thrown it back in the Government's face.

"We are losing £20,000 a week by not having a stadium and the council's motive is to ruin us."

Lewes District Council's lead councillor for planning, Neil Commin, said: "We know the High Court will quash the decision because the Government's lawyers have admitted it was flawed on one key point, which Mr Prescott then uses repeatedly to justify his decision.

"But they refused our reasonable request to guarantee that all of the other points in the challenge will be dealt with by the Government.

"John Prescott's decision contained a number of fundamental flaws. The High Court will look at each of the points and decide whether they are justifiable.

"That means the issues will be sorted out once and for all. That will be to the benefit of all the parties involved."

The club hoped Ms Kelly would make a new decision by late summer allowing work to start on the stadium.

Mr Perry said: "We have no idea how long it will take now."

He pledged to win the court battle and claim the club's legal costs back from the council, which could run into hundreds of thousands of pounds.

Paul Samrah, leader of the newly-formed Seagulls Party, which has pledged to field candidates at next year's local election if the council persists in its opposition, said: "This is incredible. Once again Lewes District Council is putting every obstacle in the way of a speedy resolution to this matter. We will challenge it all the way.

"This is another delaying tactic which potentially will send the club bust." Brighton Pavilion MP David Lepper said: "I am disappointed the council has not accepted the inevitable - that this stadium is badly needed by the entire community, including people in Lewes, and it must happen.