It was revealed last week how accounts released earlier this year revealed the service will be haemorrhaging almost £1m a year by the time the contract with NCP expires in September 2009.

But Lancashire County Council now says the service is in good health because money raised from parking meters in Preston and Lancaster should have been counted as Parkwise income.

Only Preston and Lancaster have on-street parking meters and, until now, money raised from them has been kept separate and used just for schemes in the two cities.

Coun David Whipp, leader of the Liberal Democrats on Lancashire County Council, said: "How they can be a million pounds adrift of the true position leaves me breathless.They should have red faces, they could probably win an Olympic medal in mislaying millions.
"It has destroyed any confidence in financial competence at County Hall."

Coun Matthew Tomlinson, for the county council, this week told the Evening Post: "In a way it is a good thing we had this deficit because it has made us look really closely at how Parkwise works.
"It does not get away from the fact there may be areas significantly more efficient at issuing tickets than others."