Recriminations are flying after BHS was paid £5m to vacate its store in Carlisle - just three months before the chain collapsed.

As part owner of The Lanes Shopping Centre, Carlisle City Council contributed £1.4m towards the pay-off.

Now Gareth Ellis, an opposition Conservative councillor who criticised the generosity of the deal, says the council has “flushed money down the drain”.

He said: “There's no doubt if it had happened now, instead of us paying BHS, they would have been begging us to release them from the lease.

“My understanding of the tenancy is that they couldn't have sublet it without our permission. It wouldn't have cost the council or any of us a penny.”

Mr Ellis argues that the council and co-owner of The Lanes, F&C Real Estate Investment Trust, might have anticipated BHS' problems.

He added: “The business was sold for £1 last year. They were clearly in difficulties.

“The sunny side of this is that we're not going to have an empty store for months on end. Primark have wanted to move in for some time.”

The store is set to open in the autumn after Primark signed a 25-year lease.

BHS closed its Carlisle store – the only one in Cumbria – in January.

At the time, the city council's leader Colin Glover defended the payment to BHS on the grounds that the arrival of Primark would bring more shoppers to Carlisle.

He said: “The units they were looking at were occupied by BHS. As part of the deal it would require us to give permission and contribute financially to the costs.

"The upside is it gives a higher profile to the shopping area and attract others. Primark is one of the top three in attracting other retailers because they like to be where there is high footfall."

As widely predicted, BHS called in administrators yesterday, putting 11,000 jobs at risk and threatening the closure of up to 164 stores. It is the biggest retail failure since Woolworths went under in 2008.

Administrator Duff & Phelps said: "The directors have no alternative but to put the group into administration to protect it for all creditors.”