Work on a cinema and hotel in Gainsborough will begin “within weeks” after the High Court threw out a legal challenge.
The development of the former Guildhall in Caskgate Street had been halted by West Lindsey District Council.
Local building firm Tillbridge Developments had challenged the council over how it awarded the building contract to rivals Lindum.
That action has this week been rejected by the High Court and work can start on the seven-screen cinema, hotel and restaurants. Tillbridge must pay the council’s court costs, which will amount to thousands of pounds.
The leader of West Lindsey District Council, Burt Keimach, said: “We were absolutely convinced we had done everything by the book all along. I was upset that a major employer in our area took this action against us.
“I believe it’s a form of sour grapes. I admit I was mildly concerned for my position.
“It is an opportunity for us to regenerate the river front and bring in much needed jobs.”
Giles Walter, director at Tillbridge Developments, said: “We felt it appropriate to challenge the fairness of the decision and question whether it was truly in the best interests of the people of Gainsborough.
“Sadly, our challenge was deemed to be out of time.
“Nevertheless, we remain on good terms with the council and look forward to working with them again on other projects.”