Monaghan County Council is clearly worried by the growing public protest in Castleblayney over its plans to dispose of substantial tracts of land around Lough Muckno to a London-based property company. This includes land which the council itself had acquired as a public amenity.

As the protesters were making final preparations for a rally in the town yesterday evening, the council and the company - Harinbrook Properties Ltd - issued a joint statement strongly defending the Lough Muckno deal and claiming it was in the public interest.

The joint statement, carried as an advertisement by local newspapers and distributed as a leaflet on the streets of Castleblayney, declared that there were "no proposals for the construction of houses of any description on high amenity lands at Hope Castle estate".

Technically, this may be true - if the estate is exclusively confined to the area purchased by the county council for development as a leisure park. However, planning permission has been granted for 88 "holiday chalets" on Stateowned high amenity land on the lake shore.

Three weeks ago, the Monaghan county manager, Mr Joe Gavin, and other officials walked out of an unexpectedly crowded public meeting at Hope Castle after the local action committee declined his request to stop using a video camera to record the proceedings.

Last Monday, the council met for more than five hours in closed session to discuss the matter and 10 of the councillors subsequently attended a meeting with the Lough Muckno Action Committee, which wants to see the lake and its environs protected from intrusive development.

Afterwards, the action committee was invited to send a deputation to another special meeting of the county council next Monday, where the issues involved will be discussed again before a decision is made on whether to renew the lease granted to Harinbrook Properties.

Harinbrook, which is run by three Irish businessmen based in London, has already secured planning permission from the county council for a scheme of 51 "holiday homes" on the site of a derelict caravan park in the Hope Castle demesne, and 88 "log cabins" in Concra Wood.

Concra Wood - owned by Coillte Teoranta, the State forestry company - is located on a drumlin at the edge of Lough Muckno, south of Hope Castle. It is densely planted with mature conifers and fringed by broadleaved trees on the lake shore.

Since the action committee was formed last May, it has unearthed a document which shows that the Co Monaghan planning officer, Mr Noel McCann, opposed the decision to grant permission for housing in Concra Wood and also placed his "serious reservations" on record.

"There are a number of very serious issues affecting this proposed development which have not been addressed in the application and, in my opinion, there has been a deliberate attempt to ignore them," said Mr McCann, who is a former president of the Irish Planning Institute.

However, "since a decision has been made to grant permission in this case" - by the county manager, Mr Gavin - he recommended a number of conditions, including one requiring a bond of £250,000 from Harinbrook to ensure completion of roads, services and landscaping.

The planning file contains a note by Mr Gavin expressing surprise at Mr McCann's reservations and saying that he took the developers' point that they had produced an agreed scheme. "We cannot now go back and say what was agreed is unsatisfactory after all this time."

The county council's room for manoeuvre was constrained by a legal agreement it made with Harinbrook in January 1995, the terms of which have never been disclosed. Both the council and the company have declined to make this lease public, claiming that it is a "private matter".

The Irish Times has seen a copy of the lease, which shows that the company was to acquire from Coillte not only Concra Wood but also another heavily-wooded area called Black Island, and to bring forward proposals to build a "substantial number" of holiday homes there too.

But a spokesman for Coillte insists Black Island "was never part of any negotiations with us", though it "might have been mentioned in a broad sense at the outset". All Coillte had was an "agreement in principle" on Concra Wood, subject to the overall project being satisfactory.

He stressed that Coillte had not yet agreed to sell the 80-acre site. "We have no closed or hidden agenda in this case," he says. "The action committee has written to us expressing its concerns and we have replied, offering to meet them to discuss the matter."

It is understood that Coillte is conscious of the lessons from Lough Key Forest Park in Co Roscommon, where another deal with a private developer - Mr Ed Sheerin, of Chase Manhattan Bank - for a major leisure scheme, including a hotel and golf course, came to nothing. Harinbrook was also to provide an 18-hole golf course in Concra Wood. This also formed part of the planning permission granted in September 1996. The county manager's decision to approve the 88 "holiday chalets" and golf course in Concra Wood was appealed to An Bord Pleanala by a local solicitor, Mr Seamus Mallon, who owns land adjoining the wood and feared that the golfers would be trespassing on his property.

Mr Mallon, in his submission to the board, claimed that the scheme had been "rail-roaded past the roads engineers, the fire department, the planning officer, the environmental services officers and the planning administration staff with no regard for their delegated duties", and that it represented a "material contravention" of the Monaghan county development plan. If the proposed development had been treated as a contravention of the county plan, the council would have had to exhibit the scheme and invite submissions from the public before the elected councillors voted on it.

Instead, the councillors had no role; it was an executive decision.

The county manager decided to grant permission to Harinbrook less than seven weeks after receiving the application. No environmental impact statement was requested and none was submitted, allegedly because the number of houses was below the threshold for an EIS.

Meanwhile, Mr Mallon withdrew his appeal after receiving an assurance from the company that his fears were unfounded. But it is clear from its ruling in another case that An Bord Pleanala would have overturned the planning permission had the appeal gone to a decision.

The case involved Mr Mallon himself. Given that Harinbrook had won approval for 88 "chalets" in Concra Wood, he sought outline permission from Monaghan County Council for three houses on his own land overlooking Lough Muckno. The application was refused.

Mr Mallon appealed to An Bord Pleanala, which upheld this decision on July 9th, saying his scheme would "seriously injure the amenities of the area". Mr Joe Brennan, chairman of the Lough Muckno Action Committee and president of Castleblayney Chamber of Commerce, says it is "staggering" that permission could be refused for three houses on amenity grounds, yet a scheme of 88 houses could "just sail through".

Other local people are also mystified, especially those who have had permission for bungalows refused.

In 1981 Lough Muckno was described as a "most magnificent area of natural beauty" in a report by the Dublin landscape architects, Niall Hyde and Associates, who had been commissioned by the county council to draw up a plan for its development as a regional leisure park.

"The lake itself is undoubtedly the greatest attraction of all. The wooded islands, the wonderfully varied shoreline, the rich and diverse wildlife, the highly acclaimed angling and the tremendous facilities for all water sports presents a recreation opportunity unique in Ireland."

So why is Monaghan County Council now seeking to divest itself of the 900-acre lake and some 80 acres of land around it? The main reason is that it wants to extricate itself from the £200,000a-year burden of servicing a large debt on its Lough Muckno leisure park development.

Mr Gavin, the county manager, told The Irish Times that the civic trust set up to run the leisure park was "not a commercial organisation" and had not been able to manage it successfully. With Harinbrook on board, "we would still have an amenity and no further losses", he says.

The caravan and camping park, just inside the entrance gates of Hope Castle demesne, had been one of the linchpins of the scheme, but it is now derelict. Last April, Harinbrook got planning permission to develop 51 "holiday homes" on the site. Both the company and the county council insist that it would not be a housing estate. The houses would be sold to investors and re-let to tourists for 30 weeks a year, according to their statement.

A levy of £4,000 per house site was imposed by Castleblayney UDC.

"That would be enough to offset the interest payments on the debt for one year," says Mr Brennan of the action group. "So how many houses will they have to grant permission for to keep servicing this debt?"

Mr Macartan McCormack, a retired Fianna Fail councillor who was involved in negotiating the acquisition of Hope Castle as a public amenity, says: "The only time anyone tried to deny access in the past was during the Black and Tan period - and they didn't succeed."

Mr McCormack is now an "enthusiastic" member of the action committee because of his concern that the estate is "going in the wrong direction". He is not, he says, opposed to development, "but it must be sustainable development that takes proper planning into account". He dismisses as "absolute and utter nonsense" suggestions that the action committee is fronting for vested interests in the town which do not wish to see Harinbrook succeed.

"I have no agenda and no vested interest, other than in keeping this amenity for the people," he insists.