BELFAST City Council received help from the Housing Executive in putting hundreds of pallets into storage for loyalists building a notorious Twelfth bonfire.
The public housing body said it provided two skips on request from the council "to facilitate the removal of the pallets" at a cost of £700.
It emerges after The Irish News revealed the council is holding in storage around 300 pallets it removed from a city centre bonfire site near a busy hotel.
Council staff moved the pallets last weekend "in agreement with the local community", the local authority said.
The pallets are being kept in a council yard and were set to be returned to the site close to Sandy Row in time for the Twelfth.
Several senior councillors have expressed outrage, with Sinn Féin saying it will oppose any attempts to return pallets to the bonfire.
In a U-turn the council has agreed to hand over many of the pallets it was storing to supply-chain firm Chep after it claimed ownership of them.
Councillors are set to discuss the controversy at a strategic policy and resources committee meeting next Friday.
Earlier this month the Housing Executive (NIHE), which owns the land near Holiday Inn, said it had "no plans" to remove the bonfire material.
But following the council's operation, an NIHE spokesman confirmed it provided two skips to "facilitate" moving the pallets.
A spokesman said: "The Housing Executive, who owns the land, did not have any involvement in the storage of the pallets removed from the Hope Street site in Belfast.
"However, we provided two skips on request from Belfast City Council to facilitate the removal of the pallets from the area. The cost of the two skips was £700.
"The Housing Executive was aware that the materials were being moved into storage."
Sinn Féin councillor Jim McVeigh has said his party is "extremely angry" about the council storing pallets, while the SDLP's Donal Lyons described the arrangement as "unbelievable".
The council initially said some 1,500 pallets were removed, but later admitted a mistake and revised the figure to around 300.
Belfast council said it "works with communities and statutory agencies to minimise the negative impacts of bonfires at sites across the city".
The site near Sandy Row is not part of the council's bonfire management scheme, but the controversy has led to questions over the initiative.
It offers groups funding of up to £1,500 for related Twelfth events in exchange improving safety and addressing environmental issues at bonfires such as burning tyres.
Asked whether the scheme withdraws funding if bonfires use Chep pallets, the council said its guidance states that "materials must be restricted to wood".
But a spokesman added: "The guidance does not make any reference to how such materials are gathered or sourced."
Michael Long, the Alliance Party's council group leader, expressed concerns about the uptake of the scheme and its effectiveness at tackling problem bonfires.
"We have a scheme that has reduced number of bonfires in it again this year. We are trying to incentivise people to come back onto the scheme but unfortunately we have less bonfires on the scheme, so it really has called into question the viability of the scheme," he said.
