A Lambeth Council blunder saw it landed with an estimated £280,000 unpaid electricity bill for thousands of unmetered street lights on its estates.

The whopping one-off payment will need to be found this financial year, after it emerged energy used by about half the street lights on council estates had not been charged for since 2004.

EDF Energy is willing to write-off four years of the electricity bill – up to £376,000, or £94,000 a year – in a bid to recoup some of the lost funding.

The bill for what the town hall assumes will be 2,240 unmetered lights between 2008 and 2009 and 2010 to 2011 will be between £250,000 and £280,000.

Liberal Democrat housing spokesman, Councillor Jeremy Clyne raised concerns over the bills.

He said: “This was incompetence by the council, which has, in many ways, got off lightly by not having to pay the whole bill.

“I only hope with finances so tight at the moment, it will not be tenants who have to pay for the incompetence by their rents going up to balance the housing revenue account.”

He said the £280,000 could have paid for at least 50 new kitchens in council homes.

The council will now decide whether to continue taking electricity for the unmetered lights, estimated to cost £94,000 a year.

It will carry out a procurement process to find the most cost-effective supplier.

A Lambeth Council spokesman said: “Tenants will not face a rent increase or higher service charges because of this. We are pleased to have reached an amicable agreement with EDF that has saved a considerable sum.”