Daniel Levy, Chairman of Tottenham Hotspur

Tottenham Hotspur’s High Court legal battle for the Olympic Stadium is delaying an £8.5million government grant meant for rebuilding Tottenham after the riots.

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The long-term regeneration cash, to revitalise the parts of Tottenham High Road worst hit by fires, looting and violence last month, won’t be released by Mayor of London Boris Johnson until the Premiership club’s legal fight is over, his office confirmed.

City Hall needs to know if Spurs will stay in Tottenham before planning where and how the money is spent.

Although critics pointed out the £8.5million reportedly lined up for Tottenham would effectively act as a subsidy for Spurs, freeing it from much of its legal obligations to improve the neighbourhood, many are looking to the wider benefits instead.

Nicky Price, vice-chairman of the Tottenham Traders Partnership, said: “If Tottenham stay that’s great. Without them a lot of our businesses will not survive. Spurs have put a lot of money into the area over the years.

“But if they don’t stay, we need this money even more so. Private and government and local should work together to improve an area. We are in urgent need of money now.”

The news follows a tense week of negotiations behind closed doors between the Mayor’s office and the club, which is also embroiled in two legal spats with rivals West Ham United about who should take over the Olympic Stadium after 2012.

The club and City Hall were reportedly on the verge of striking a deal to release the money if Spurs dropped its High Court challenge against West Ham winning the Olympic Stadium.

But Spurs pressed ahead with its court case regardless, leaving Tottenham’s future regeneration up in the air once more and creating a headache for City Hall, Haringey Council and the people of Tottenham.

A spokesman for City Hall said: “We are waiting to hear from Tottenham Hotspur on their plans to rebuild on their current site before any agreement on financial support from the mayor can be confirmed.” The club declined to comment.

The money is one of several aid grants and funds running into tens of millions of pounds promised for Tottenham in the wake of the riots. A £3million London-wide High Street Fund is open for bids, as is Haringey Council’s Tottenham Fund which stands at over £23,000.