COUNCIL chiefs face a flood of payback claims from firms over millions of pounds paid for the privilege of building along the axed tram routes.

Miller Homes is in line to receive the first of the settlements after it is agreed by Edinburgh City Council next week. Others are expected to follow, but the council is only going to give back half of the money that firms paid directly.

Miller gave £443,131 and under the compromise deal the council will return £221,565 to the developer.

One-quarter of the remainder will go to Miller to pay for apprenticeships in the city and the council will keep the last quarter and put it towards transport projects.

The premium was paid for projected benefits from having access to trams.

Miller's contribution was for homes it built in Granton along one of three abandoned lines. The developer described the deal as "pragmatic".

The council said the same agreement will be considered for others who come forward.

Its lawyers are already in discussion with three other parties along the Granton route over contributions totalling £215,456

It is unclear at this stage how much of the £7.6 million already collected from developers will be paid back.

The council only last year decided to stop asking companies looking to bring in business and jobs by building homes along two of abandoned routes, from Haymarket to Granton and the airport to Kirkliston, for cash.

It admitted in the document to go before councillors next week there is "little or no prospect of this section of the route [to Granton] being delivered in the near future".

Critics believe the same stance will also be taken on the third axed route, the extension from York Place down Leith Walk to Newhaven.

Every company that gave ­developer contribution money to the council to build along the routes will be in a strong position to make a claim.

Planning convener Ian Perry said: "We will be liaising with other parties who have paid tram contributions relating to the Roseburn Corridor (Granton) section of the tram route to advise them of the settlement agreed with Miller, inviting them to approach the council if they wish to discuss similar arrangements."

The previous deal was for the council to provide a full repayments to be made six years from now if the tram has not been delivered or alternative uses for the contributions have not been agreed between the parties.

The settlement proposed "allows both parties to conclude matters before 2020 and make effective use of these monies" the council said

A spokeswoman for Miller Homes said: "We have been working with the council to reach an agreement on this matter and we are delighted we have been able to reach a pragmatic outcome."