People living in Priory Street, Farnborough, are in uproar after spaces for four vehicles in the busy road were cordoned off and rented to residents in an adjoining street.
The council has bitten back, saying that although people had been parking in the spaces for many years, the land was not on-street parking and the sole property of the council.
It has been revealed that the people now using the spaces paid £50 each to assist in the installation of the bollards.
If they wish to continue leaving their cars in Priory Street they will pay £25 a year from April 2003.
Sue Spoor, who has lived in the street for seven years, is angry at the way in which the matter has been dealt with.
She said: "We don't have a driveway or a garage and neither does my neighbour.
"It does get quite busy with the recreation ground nearby, particularly on a Sunday when people play sports, so it can be difficult to park.
"Whilst I have a certain sympathy for the residents of Rectory Road, robbing Peter to pay Paul is not a viable or fair option.
"The attitude of the council is beyond belief. Nobody in Priory Street was advised of the purpose of these chained off areas."
A month ago several metal posts and chains were put up around land at the bottom of the street.
When Mrs Spoor telephoned the council, she was told that they were parking spaces for residents of Rectory Road.
In a letter to the residents Graeme Brewster, the council's highways projects manager, said: "As part of the Rectory Road traffic safety scheme the cabinet agreed to the area, which is owned by the council, being made available to residents of four properties where on-street parking is to be prohibited.
"Accordingly works have been undertaken to surface the area and bollards and chain link fencing have been installed to secure the parking area."
In a further twist to the dispute, Mr Brewster claimed the new parking area had already been vandalised.
He said: "Regrettably there have already been two known instances of criminal damage to the equipment, together with intimidating notes attached to vehicles and delivered to residents in Rectory Road.
"As a responsible authority this behaviour cannot be condoned and the matter has accordingly been referred to the police."
Mrs Spoor responded to the council in a letter of her own and has denied that the vandalism has been caused by anyone in the street.
She said: "Believe me that has got nothing to do with us. I don't believe that type of thing solves problems.
"There are often youngsters who hang around the recreation ground car park at night, so they started to lock the gates. So now the car park is empty all night long, and if they could install some security lights or CCTV this could be a way of resolving the matter."
Jim Pettitt, head of highways and transport services, underlined the council's position by confirming that the land is not part of the public highway.
He said: "People may have got used to parking there in spite of the fact that strictly speaking they were not allowed.
"We have had a parking problem in Rectory Road and there are houses where off-street parking is not an option.
"These residents have been given permits to park in Priory Street and it is for their use only."
Sue Spoor is pictured in the parking area.