THE Co Tyrone engineering firm embroiled in a long-running planning battle received thousands of pounds in public funding to build the shed at the centre of the dispute.
Reid Engineering's owner Alan Reid applied in 2010 for rural development funds to extend the company's workshop building outside Cookstown.
The funding application was for a grant of £50,000, according to documents seen by The Irish News.
The site on Knockanroe Road has been the subject of numerous planning probes, and an enforcement notice was issued as the shed was built larger than plans permitted.
But residents have expressed shock as planners have now recommended that the unauthorised building is retrospectively approved.
It will be considered by the council's planning committee on Tuesday.
The European rural development funding in the area was administered through the old Cookstown District Council before the creation of the new 'supercouncils' in 2015.
Despite repeated requests for information over several days, the new Mid Ulster District Council was unable to confirm how much funding was applied for and how much was awarded.
But in a statement a spokeswoman said: "We can confirm Alan Reid received a letter of offer from the rural development programme 2007-13 and accepted this letter of offer for a capital build workshop extension during 2011."
Reid Engineering was asked how much funding was received, but the firm did not respond to requests for a comment.
