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Halton College in Cheshire has lost a High Court battle to recover more than Pounds 3 million from its county council following a row over European funding.

The college claimed that financial assistance from Europe for providing courses to students had been withheld between 1988 and 1993 when it was controlled by the local education authority. The council argued that the college had already received full funding for students in its budget plus an incentive payment.

The judge dismissed the case and awarded costs, which could be more than Pounds 10,000, against the college. Walter Done, county education officer, said he was pleased with the result. "This judgment confirms that we have operated our budgets fairly," he said.

But the college has announced its intention to appeal. It claims that students had to be subsidised from other funds and as a result other programmes were under-funded.

Two similar cases brought by Birmingham further education colleges succeeded last month. The College of Food and Tourism and Sutton Coldfield College may receive up to Pounds 14 million from their city council following a High Court judgment which found that the council had failed to deal with its European Social Fund grant properly.