West Norfolk Council leaders have been asked to explain why the authority provided a £150,000 loan for the construction of a new community hub.
The new Marshland Hall complex in Marshland St James opened with a week of activities last month, following a £1 million construction project.
Although most of the money for the project was provided by a lottery grant, independent councillor Charles Joyce questioned why the borough council had got financially involved with the scheme during last Thursday’s full council meeting.
But leader Brian Long argued the money attracted a higher return for the authority than it might otherwise have done.
And he claimed the big response to the building’s opening justified the council’s involvement.
He said: “There were over 1,500 people through its doors in the first week.
“That’s a real testament to those involved in driving forward what has been a desperately needed facility for such a long time.”
Mr Long also confirmed that he is a trustee of the charity set up to run the hall, but insisted that he had not taken the decision to authorise the loan payment.
Former borough mayor Geoffrey Wareham, who chairs the council’s corporate performance panel, said the issue had also been raised at a panel discussion a year ago.
The meeting was also told that the loan had been paid to the Marshland St James parish council, because of its status as a responsible financial authority.