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A failed lottery project in Luton has led to a bitter row between a local contractor and the town council, including accusations of opportunism and a threat of judicial review.

Bickerton Construction, a St Albans-based contractor with a turnover of £25m, is seeking more than £436,000 for work on the £4m Artezium arts centre. The move comes three years after it completed the project and 10 months after the centre went into receivership.

Bickerton managing director Ray McAuley has written to all 48 Luton councillors seeking a public debate on the issue, and said the firm would seek a judicial review into the demise of the centre.

The letter, sent last month, said: "If the administration is unsuccessful, we will seek leave for a judicial review enabling us to examine the conduct of Luton council in the years leading up to this situation."

Bickerton claims that Luton council is preparing to take court action to seize control of the centre from administrator Smith and Williamson. It said this would slow down attempts to restore the centre as a going concern and pay back creditors.

McAuley claimed that the council wanted the centre at a knock-down price. He said: "The council could inherit the centre as a massive windfall gain and avoid paying the true market value."

The council could inherit the centre as a massive windfall

Ray McAuley, managing director, Bickerton Construction

Luton council defended its role. It claimed that it was a creditor in the same situation as Bickerton and said the contractor must take up its losses with Smith and Williamson.

A council spokesperson said: "It was against our advice that the arts centre went into the long and expensive administration process."

The project hit financial trouble last August, closed and went into administration.

A spokesperson for Smith and Williamson said the council seemed set on taking court action. "We asked to meet with the representatives from Luton council to discuss mediation, but the council's view appears to be that court proceedings are inevitable."

The council, however, said it was acting in the interests of taxpayers. A spokesperson said: "We have two principal interests; the first is to recover the fantastic arts centre building and the second is to protect the council – which means protecting the taxpayers' money."