ENVIRONMENTAL campaigners are furious peat-cutting on Hatfield Moors is set to continue - despite a £17 million government deal to stop the practice.

It comes as horticultural firm The Scotts Companyn confirmed it has extracted peat from part of a 75-acre storage area on the site.

Three years ago the company signed the deal with English Nature to end peat extraction on Hatfield and Thorne Moors, but it has now emerged that the company retained part of the site.

Helen Kirk, executive secretary for Thorne and Hatfield Conservation Forum, said: "It's incredible, Scotts have already had 18.62 m of UK taxpayers money, so to come back to the table in breach of the spirit of the 2002 Agreement demonstrates avarice beyond belief. They may have a legal right but morally it's indefensible."

Friends of the Earth habitat campaigner Craig Bennett said Scotts "had driven a bulldozer right through the agreement," which the group had thought would end peat extraction by the end of 2004.

He said: "This isn't the environmental victory we celebrated three years ago. It's outrageous that this American corporation is set to continue digging up one of Britain's most precious wildlife sites.

"It's time this company walked away from Hatfield Moors once and for all. And it is time that the UK Government stood up to businesses which benefit from destroying the environment."

But a spokesman for Scotts has defended their continued peat extraction, saying claims made against them are "an exaggeration"

He said: "Scotts continues to own a freehold site of around 75 acres on Hatfield Moor. The site alongside Scott's production plant was not part of the handover of 3770 acres of peat moors passed to English Nature in 2002.

"Before extraction of the peat, Scotts reminded English Nature of the existing permission and consulted them to find the actual places where working should take place. In the event, some peat was taken from 'high spots' so as to preserve the ultimate restorability of the land."

And Matt Reed, managing director of Scotts UK, said: "If owning a freehold site that has legitimate planning permission is a problem to environmental groups and the local authority, then we look forward to sitting down with all parties to discuss suitable alternatives."

A spokesman for English Nature said: "A residual area of land used for stockpiling was not included in the agreement but this is still protected by law."

• Environment Minister Elliot Morley officially opened the new Humberhead Peatlands National Nature Reserve on Friday, which covers Thorne and Hatfield Moors, along with Goole and Crowle Moors. English Nature is making a future bid for an education and tourism centre, as part of a new public access which includes footpaths, new signage and two car parks with access planned at Boston Park and Ten Acre Lake.

Don Valley MP Caroline Flint has heralded it as "the start of a new era of public ownership of the moors."