The Otago Daily Times reported last week the council spent $5.62 million buying up six homes and one farm, only to lose $1.07million on selling most of them.
The aim was to remove opposition from residential neighbours opposed to the rezoning of rural land for industrial use alongside Dukes Rd, in a plan change known as Variation 9B.
However, a confidential council report from 2004, made public last week, showed the council had one eye on the neighbours and another on undermining the legal position of the Taieri Plain Environmental Protection Society.
The group, known as Plain Sense, was opposed to the loss of high class soils on the Taieri to the industrial zone, as well as the impact on neighbours, and planned to fight the council's rezoning plans in the Environment Court.
Mr Cull said yesterday the deal was agreed three years before he became a councillor, and he did not want to be drawn into ''the politics of the day''.
But the inflated bill, and the ultimate cost to ratepayers, underscored ''the risks of taking on long term liabilities'', he said.
''It appears in this case the risks weren't adequately taken account of, and the chickens have come home to roost,'' he said.
The report, by the council's then strategy and development general manager Peter Brown, said the council wanted to act to ''significantly'' erode the group's legal position. It could do that by buying out the neighbours, and leaving Plain Sense to fight on alone, it was suggested.
''It was believed that if the property owners could be convinced to withdraw their objections, Plain Sense's case would be weakened considerably as the court is likely to have more regard for the neighbours' concerns than the high class soil issue,'' the report said.
As a result, the council offered five neighbouring homeowners a deal - the option of their properties being bought by the council, at a premium price, any time in the following 10 years, as long as they withdrew their opposition.
The report suggested the cost of buying all five properties would fall between $1.8 million and $2.4 million, depending on when in the 10-year period owners opted to sell, if at all.
Money could be recouped by on selling the properties, but the importance of creating the new greenfields industrial zone ''cannot be overstated'', the report said.
''Dunedin desperately needs greenfields industrial land for future development ... Put simply, the council cannot afford to lose this rezoning application.''
But as the ODT reported, the bill for buying the properties hit $5.6million, after costs rose and a 15ha farm at 91 Dukes Rd, bought for $1.75 million last year, was included.
