Steam railway bosses have been accused of pulling the plug on Kingswear's Christmas lights cash in a 'petty' reaction to opposition to the company's £200,000 new station office block.

But rail firm manager Andrew Pooley has dismissed the whole row as a 'misunderstanding' for which he is prepared to apologise.

For the last two years Dartmouth Steam Railway and Riverboat Company has put £150 towards the cost of the village's Christmas lights – including a tree outside the station.

But this year, Mr Pooley wrote to the parish council saying the firm would only be giving £50 towards the lights.

In his letter to the council he said no figure had been put on this year's company contribution and added: 'However, since that conversation we, as a company, have been subject to a somewhat critical and disparaging press and some, at times, rather unpleasant remarks from local residents following our building of a new signal box office at Kingswear station (both letters to me personally and to the press). Therefore, I have regrettably decided that we will not make the assumed £150 donation this year but reduce it to £50.'

And the letter ended: 'Whilst it may appear churlish to reduce the figure donated to the Christmas lights, it does appear rather false to criticise us on the one hand whilst being happy to accept money on the other.'

Parish council chairman Jonathan Hawkins said: 'He feels that because the council didn't support the development he is unable now to offer the full amount of money.

'From our point of view, it is a great shame. It seems petty.'

Mr Pooley admitted he had criticised the village and its opposition to the railway offices but said: 'I think I was probably making a point badly.'

He added: 'I think there has been a misunderstanding and I apologise if that is the case. We want to work with the community. A lot of people consider we have not done so by putting up a building that they find offensive but we are protecting the business for the long term and a number of jobs in the process.'

He said the company had decided to spread its charity cash around more this year – which had included organising a free visit for hundreds of Barnardos children and they carers.

'We are trying to make the money go further with more people,' he said.

The village currently appears to be at war with the rail firm over the new office block which was built without planning consent. The firm – which is now using the office complex for its staff – claims that as a railway operation it is exempt from having to apply for permission.

A campaign group claims it did need permission and pressured South Hams Council to commission an independent legal investigation, which is on-going.

The council has supported the campaign group and recently objected to the company's plans to build a new station at Greenway to improve access to Agatha Christie's former home, Greenway House.

Cllr Hawkins said the council had only ever been doing its job of reflecting the community's views.

'We would like to start rebuilding bridges with the rail company but this seems a funny way to do it,' he said.

'The parish council is elected to represent the views of the community and that was all that we were doing. It is a shame that Mr Pooley cannot separate the two issues.'