The prospect of a costly court battle over Oxfordshire County Council's decision to charge thousands of Oxford residents for parking in their own streets is looking more likely today.

A legal challenge could soon be mounted by Oxford City Council on the basis that County Hall's consultation on parking permits was flawed.

The city has already taken advice from counsel, with the legal options expected to be put to the full city council on Monday, October 2.

The Conservative-controlled county council cabinet voted unanimously on Tuesday to charge residents in Oxford £40 a year for parking permits.

The nine councillors, who all represent areas outside the city, decided to go ahead with the proposals even though a city-wide consultation showed two thirds of respondents opposed the plan.

City council leader John Goddard said the prospect of the city being locked in an expensive legal showdown with Oxfordshire County Council would be damaging for both local authorities.

But, speaking from the Lib Dem Conference in Brighton, Mr Goddard said: "There is a strongly arguable case that the consultation was seriously flawed.

"It could well appear that the county council made up its mind in advance, and did not consult, as they are required to do.

"If it came to a confrontation, I don't think that would be good for either council. We could be in court, which would be very expensive.

"And it would be unfortunate that two councils, both meant to be serving the wishes of their constituents, were unable to sort out a sensible way forward."

Richard Dix, the county council's head of transport, said arrangements for introducing the scheme were being finalised.

He said: "When all is ready to go, likely to be early next year, the first payments that residents will have to make will be when their permits come up for annual renewal."

Mr Dix said the expected £480,000 income would be spent only on enforcement or, if there was a surplus, on transport in Oxford. In zones where more than two permits per household can be held, the charge will be £80 a year for a third permit and £120 a year for further permits.

The county council claims the charges compare well with other cities, such as York where permits cost £86, and Bath, where they are £55.

David Robertson, the county council's cabinet member for transport, said: "We had a long hard look at the consultation and balanced that against the need for fairness across Oxfordshire. Things came back from the consultation that needed our attention and we acted upon them."

A spokesman for the city council said the likely cost of court action would be "factored into any decision taken", adding: "Any challenge would have to come out of the council's own resources."