Dartmouth swimming pool bosses are hoping to dodge a massive £341,000 tax bill by persuading the district council to become the front man for their £2.5m pool project.

And the VAT pool bosses save will ensure there is no cost cutting when it comes to building the town's new indoor swimming pool.

If South Hams Council puts its name to the huge contract to build the pool, then it will be able to claim back all the VAT on the scheme which would otherwise go to the Treasury.

Now the Dartmouth and District Indoor Pool Trust has begun talks with the district council and formally requested that it becomes the official 'constructor' of the pool.

Trust chairman Sir Geoffrey Newman: 'The trust would continue to project manage the pool as we always intended to do but if South Hams Council becomes the constructor it means that the council will be able to recover all the VAT.'

The county council is already contributing £1.5m towards the pool project, South Hams Council is contributing the site next to the town's leisure centre and Dartmouth Town Council has pledged £250,000 towards the project.

But pool trustees fear that building costs are rising and Sir Geoffrey added: 'We want to ensure that the pool will work well for the community and is not subject to any cost cutting that might reduce this and make it less attractive.'

The pool trust is currently involved in putting together a detailed tender which will go out to potential building contractors.

The trust has spent years campaigning and putting together plans for the town's dream pool – securing planning permission for the project earlier this year. But now the trustees are anxious that the district council heads up the huge scheme to make the vital VAT savings.

The move follows talks with the local authority tax advisers Price Waterhouse Cooper and is 'perfectly legal', explained Sir Geoffrey.

A statement from the trustees explained: 'Trustees have been searching for a way to structure the project's VAT affairs for the past three years and the accountancy firms approached have all come to the same conclusion, but only recently has the trust come across a firm with so much firsthand knowledge of local authority tax affairs.

'If this solution is not adopted then a massive £341,666 of the total £2.05m local authority funding would go back to the Treasury in the form of VAT, money which could otherwise be spent on providing a more efficient, viable pool.'

It continued: 'However, the trust is quietly confident that this solution will be given a positive reception, as it would seem perverse of the district council to make a grant of £400,000 towards the construction of this pool and yet refuse to adopt a perfectly legal scheme which would save the trust giving almost the same amount back to the Treasury.'

The trustees have already had talks with South Hams Council leader John Tucker and leading council officers.

Now they are waiting for the district council's answer after making a formal written request.

Sir Geoffrey said: 'If they accept this perfectly legal way of doing things then we will have access to this money which will help enormously in making a viable pool.'