THE tenants of a dilapidated York building allegedly turned down £250,000 to surrender the lease to the city council.

City of York Council sources told the Evening Press Lionel Davis and Keith Carby refused the huge sum, offered provisionally, to give up their rights over the Bonding Warehouse, in Skeldergate.

Now, as the council announces it is meeting with English Heritage this week to discuss "acceptable future uses for the building", the duo said they were still keen to work with the authority on the future of the former pub.

And they denied they had rejected the council's cash.

The Evening Press reported in March how council chiefs agreed to start legal action against Mr Davis and Mr Carby.

The Bonding Warehouse was a busy restaurant and public house before it was damaged by floodwater in November 2000.

The tenants have not traded from the 19th Century riverside building since then, and have been locked in a war of words with the council.

Mr Davis has claimed the council did not carry out "certain" repairs to the building after the flooding.

Last year, the building was occupied by a group of squatters, who claimed they were protesting against buildings being left empty in York.

Mr Davis and Mr Carby have a 50-year lease on the building, which runs until June 1, 2028, at a rent of £20,000 per annum.

Mr Davis today said the £250,000 sum was a "complete fabrication".

The Wetherby-based businessman said: "They offered us £375,000 some time ago and then took the offer back. It was the council which asked us to stop trading (as a bar).

"We are waiting to discuss matters with the council. We are not objectionable. We want it to be settled, but it has to be reasonable and commercial.

"It has cost me more than £150,000 over the past five years. I am not a developer and we want to talk at all times with the council. It is a beautiful building and could be one of the most glamorous buildings in York."

A City of York Council spokeswoman said: "The council is meeting English Heritage to discuss acceptable future uses for the building, although there are no firm proposals at this stage.

"At the moment there is no offer on the table. No discussions have taken place between the tenants and the council for more than six months, although there had been negotiations prior to that during the last 12-18 months."

Updated: 09:51 Tuesday, November 15, 2005