District councillors in Chichester have published the secret agreement that lies behind its threat to sue West Sussex County Council for breach of contract.

The wraps were lifted on a 1997 deal made behind closed doors.

The decision to make the documents public was taken by district council leader Jane Chevis, who is angry at claims her council has threatened High Court action because it is afraid of competition in the booming health and fitness market.

She said yesterday: "That is a complete misrepresentation of the facts."

The row centres on the sale of the Stockbridge Road site of Chichester High School for Girls for a leisure complex that will give the county council money to build a school on a nearby site.

The district was happy to help negotiate a scheme that included a multiplex cinema, a bowling alley, restaurants and a hotel.

But earlier this year when a nightclub was removed from the plan and replaced by a health and fitness club, the district council reacted angrily.

It claimed there was an agreement not to include health facilities because it was investing £2 million on new health and fitness facilities at the district-run Westgate Leisure Centre, less than a quarter-of-a-mile away from the development site.

The district council voted unanimously last week to sue the county council if it pressed ahead with a decision to sign a rumoured £6 million deal with a developer that includes a health club.

Documents show how it gave up the potential to make millions of pounds by shelving plans to market one of its own sites for a cinema and leisure complex.

The district council says it acknowledged that Chichester could not support two identical schemes and agreed to help the county council market the site of the girls' school.

One document says: "In view of the effect that any health and fitness or sports facility might have on the future financial viability of the Westgate Leisure Centre and the consequential damage this would do to the district council's leisure strategy, it is agreed that the county council will direct its prospective developers to identify alternative appropriate leisure uses."

Coun Chevis said: "My council feels terribly let down by the county council's decision to tear up the agreement."

She proposes independent arbitration to avoid a court case between two Tory run councils.

A spokesman for West Sussex County Council said: "We will consider what the district council has said and will issue a statement later."