A charity playgroup could be left nearly penniless because of a wrangle over a new lease for its premises.

North Somerset Council is charging the group more than £4,500 to draw up a lease to allow it to continue operating.

Congresbury Pre-School Playgroup has been based next to St Andrew's Junior School in the village for nearly 20 years.

The group, which caters for around 45 children a week, started by leasing the land from neighbouring St Andrew's Church and paid £1 a week in rent.

But when leaders at the registered charity applied to North Somerset Council for planning permission to put a new building on the land, it transpired it was not owned by the church but by the authority.

Now the council has insisted the playgroup has a formal lease drawn up for the site – and has charged it £4,650 in legal costs to do so.

The council also wants to increase the rent the playgroup pays for the site from £1 to £20 a week.

Managers at the playgroup, which is open five days a week, say they have little money and that if they are forced to pay the legal bill it will leave it practically penniless.

Playgroup chairwoman Carly Butchers said: "When we gave up the last lease and applied to the council for the new one, we thought we would be issued with something similar by the council.

"In our opinion, the lease that North Somerset Council has offered us is far more complicated than it needs to be. If they had just issued us with a normal lease, then the costs would not have escalated.

"We do have limited funds in the bank and could afford to pay the legal costs if we had to, but it would leave us with a zero bank balance.

"This would mean that all the money we do have would have to go on the legal bill and that there would be nothing left to improve the pre-school or buy new equipment for the children."

Playgroup supporters had spent the past several years raising cash to replace an old building.

Congresbury Councillor Tom Leimdorfer raised the issue with the council's executive this week.

He said: "These are the sort of fees that the council would charge a developer, not a charitable organisation."

He added: "If the pre-school fails, then there will be no provision locally for children in the village."

Council spokeswoman Zoe Briffitt said council leader Nigel Ashton had been made aware of the situation "and has asked for all the relevant paperwork and will look into the matter".