The Kerry-based hotel group behind the last-minute legal challenge to the €50m state-funding package for Cork's event centre has been accused of lodging a “nasty, vexatious, commercial ambush” on the stalled project.

And there are fears that it could cost Cork City Council up to €500,000 to deal with the legal issues amid new concerns about the apparent lack of transparency around the process which led to the funding deal announced in early January.

It was hoped that the new funding package was the last major hurdle facing the project.

But former Lord Mayor of Cork, Cllr Terry Shannon, launched a blistering attack on the Gleneagle Group, the operators of the INEC in Killarney, for taking a legal against the funding deal to the High Court.

He said there was a stunned silence in a meeting of the council’s corporate policy group (CPG) on Monday afternoon when council chief executive, Ann Doherty, confirmed the latest hurdle to hit the event centre project.

He said he believes the legal challenge is motivated purely by “commercial reasons”.

“This group has not been involved at any stage in this long tender process,” he said.

“It’s a nasty, commercial ambush designed to try and stall this project in the hope that people might give up. To ambush it at this late stage is outrageous.

“But we as a council will meet this challenge head-on. We are united with the executive to deliver this project. It has to go ahead, from a reputational point of view for the city.

"Cork City Council has to be seen to be able to deliver. This isn’t just about Cork city. This will be a regional piece of infrastructure that will help the region.

“I would urge Cork people to wake up, and consider carefully where you might stay if you’re thinking of taking a holiday in Kerry,” Mr Shannon said.

The Gleneagle Group declined again to comment given that the matter is the subject of court proceedings.

Another former Lord Mayor of Cork, Cllr Mick Finn, described the group’s legal move as a “challenge for the sake of it”.

“Are they lodging a challenge for the sake of it or are they saying they can deliver something similar, and come up with €35m, as is the case with BAM and Live Nation?” he asked.

“I would ask them to reconsider and recognise that what’s being proposed in Cork is a different offering, a different product to what they have."

However, Labour Cllr John Maher has raised fresh questions about the apparent lack of documentation charting the contacts between the city council and government on the new funding package, which was unveiled in early January.

“Through Freedom of Information requests it would appear that there was nothing put in writing by either side to get the €50m payment over the line,” he said.

“That just doesn’t sit well with me or anyone else involved in the transparency of the project. Was every meeting on this not minuted?

"No memo exists at all. It’s just ludicrous and underpins the scepticism that people have on the delivery promises for this project.”

Following the submission by the Gleneagle Hotel Ltd last Friday of a notice of motion to the High Court seeking a judicial review of the funding decision, the city council has a week to prepare its response.

Gleneagle Hotel

The matter is listed for an initial court hearing on February 17.

Meanwhile, An Bórd Pleanála has yet to issue its decision on the appeal against the council's grant of planning for the enlarged venue.

Next Wednesday is the fourth anniversary of the 2016 pre-general election sod turning on the site.

The hotelier taking the legal challenge was at the centre of a rezoning controversy in Killarney at the height of the Celtic Tiger.

The Standards in Public Office Commission (SIPO) investigated a complaint against Patrick O'Donoghue in 2006 when he was a Fianna Fáil member of Killarney Town Council.

He is the current CEO of the Gleneagle Group, which runs the INEC.

The complaint from the Killarney town manager was in relation to a motion passed by the council a few months earlier to rezone 20-acres of land around The Gleneagle and its sister hotel, The Brehon, and designate the lands as part of the “town centre”.

Officials were opposed to the motion.

SIPO found Mr O’Donoghue had breached the Local Government Act and the Standards in Public Office Act by failing to disclose the full nature of his personal interest in the motion and failing to withdraw from the discussion and the vote, and more seriously, that he had sought to influence the council's decision by seeking the support of councillors in relation to the motion.

On foot of SIPO's findings, Mr O’Donoghue pleaded guilty before the Circuit Criminal Court in Tralee in March 2009 to a charge of seeking to influence the town council to rezone lands in which he himself had a beneficial interest, and he was fined €5,000.