Radley Parish Council is pushing ahead with its fight for town green status for Thrupp and Bullfield lakes despite RWE npower suspending its dumping plans.
The energy company last week said it was putting plans to dump spent fuel ash from Didcot Power Station into Thrupp on hold because of a new scheme to recycle the waste.
Campaigners fighting the dumping plans suffered a blow when their bid to get the area awarded town green status was rejected.
But the parish council is pressing ahead with an appeal against Oxfordshire County Council's decision.
If the parish loses, it faces a £40,000 bill which campaign group Save Radley Lakes is currently fundraising for.
Parish council chairman Jennie Standen said: "The statement that npower put out was great but it was only deferral.
"It doesn't mean that they have cancelled their plans - they could come back at any time should they find that their recycling is inadequate to do with output.
"We still feel that the lakes need the protection of becoming a town green so we would still like to go ahead. We are absolutely certain, having taken legal advice, that there were errors in the inspector's report. We feel it did not reflect the evidence that was given and we do wish to contest the decision."
A survey of Radley residents found that 80 per cent of those who replied supported the move to seek a judicial review of the county council decision.
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