Benidorm Town Hall is under severe financial pressure after Spain’s Constitutional Court rejected an appeal aimed at avoiding compensation over land in the Serra Gelada Natural Park. The decision means the council could be forced to pay more than €350 million to two development companies, almost twice the municipality’s annual budget.

The dispute dates back more than two decades. A planning agreement signed in the early 2000s allowed building rights from land later protected as a natural park to be transferred elsewhere in Benidorm. Although environmental protections were introduced in 2005, the agreement was extended several times before the landowners accused the council of failing to comply.

After a series of court cases, the Valencian regional high court ruled the council had breached its commitments and set compensation at €283 million plus interest. The Supreme Court later refused an appeal, and the Constitutional Court has now declined to hear a further challenge, ordering the case closed.

The current mayor, Toni Pérez, argues the agreements are legally void and says the council is still pursuing parallel legal action to overturn them. A separate ruling against the council this week can still be appealed.