Fingal County Council may have to pay twice for land at what is believed to be the largest unauthorised halting site in the State, at Dunsink, near Finglas in Dublin.
A group of families and individuals have lodged "squatters' rights" claims in relation to the land, and are now seeking significant cash settlements from the council in return for vacating it.
The council is trying to gain possession of the site, with a view to putting together a major redevelopment plan for the area, which is close to the old dump at Dunsink.
The area has been occupied by Travellers for decades now, some of whom have built permanent dwellings.
Some of the dwellings are enveloped by walls, paving, gates and other facilities around their mobile-home sites.
At any time at least 100 individuals are believed to be living on the sites, and this can rise to nearly 500 at various times of the year. A number have also been running businesses from there.
Some of the property being squatted on is owned by the council itself, but other parts are owned by third parties unconnected to those squatting there.
The council has placed compulsory purchase orders on the land it does not own.
However, it is facing having to pay not only the official owners of the land, but also the individuals who are squatting on it.
Under case law, an individual who can show continuous occupancy on a site for 12 years can assert squatters' rights.
Yesterday Fingal County Council moved to play down suggestions that it is facing a bill running into the tens of millions to regain possession of the area.
In a statement yesterday the council said it had been "pursuing legal action to address the illegal occupation and unauthorised uses of lands in and around Dunsink Lane. As part of due process individuals have claimed 'possessory title' to a number of land plots in that area," the statement said. "The council, in addressing these claims and in its pursuance of these aims, has made a settlement with the occupier of one area of land only.
"While negotiations are being pursued without prejudice with other claimants, the council maintains its view that no such title exists."
The statement followed a report in yesterday's Sunday Times, which said the council had already paid €1.1 million to one person who had built up a second-hand car parts business on his site.
The statement said the council was responsible for regularising the non-permitted uses of lands and to address illegal occupation of its own lands.
The Dunsink area has been targeted by gardaí on a number of occasions in recent years as part of operations to crack down on networks handling stolen goods.
It was also the subject of public order problems and a subsequent large-scale Garda operation three years ago after the council blocked off part of the lane in a bid to clamp down on illegal dumping.
Travellers' rights groups have previously claimed that the Dunsink community has been unfairly singled out by the authorities, and that the community has been victimised as a result.