MINISTERS have agreed to pay around half of the £14.8 million Kent County Council says it is owed to meet the costs of looking after child asylum seekers.

The Home Office said it was prepared to pay Kent £7.1million but was still checking the council’s claim for the remaining £7.7million in grants.

A row broke out after KCC’s ruling Tory leaders threatened to sue the Home Office in an attempt to bring the matter to a head and recover the money.

KCC says it intends to press ahead with its claim for all the money but it is unclear whether its threat of legal action has been suspended while negotiations continue. Council chiefs had given the Government until March 10 to settle the issue.

In a statement, KCC said it intended to "pursue vigourously" its claim for the full amount.

The Home Office said it was still scrutinisng Kent’s figures but was prepared to hand over the full amount if the claim was proved to be valid.

"Kent clearly believes that it is owed the money and we have been working closely with them to resolve the outstanding money. We have agreed a payment of £7.1million but work is still going on to resolve outstanding discrepancies. Obviously Kent does need to produce evidence to subtantiate its claim," a Home Office spokeswoman said.

Home Secretary Charles Clarke recently warned Kent that it might not be entitled to all the money.