Extending the £207m tram line to Newhaven was approved by Edinburgh City Council last month.
But councillors were not shown the full legal advice until after the decision was taken. Elected members also did not see the full extent and wording of two contracts awarded to companies to carry out the construction phase.
A freedom of information request revealed that £378,000 has been paid to law firms Ashurst and CMS for legal advice for the project so far. But the authority has refused to release it to the public. Michael Smith, legal advisor from Ashurst, appeared in front of the finance and resources committee to answer questions on two contracts awarded for the tram construction.
The extension is being overseen by the in-house legal team but the advice was outsourced due to the importance and complexity of the project. It is thought the majority of the legal fees have gone towards drafting two contracts.
Councillors were only issued with the full legal picture after a request at the March full council meeting by Conservative Cllr Andrew Johnston. The plea came at the same meeting the extension was approved - but members were handed the confidential advice four days later.
Cllr Johnston said: “The decision has now been made but we certainly should have seen the legal advice before determining whether to go ahead with it.
“Given the mess we got into last time where things weren’t clear, it’s only right that the full legal advice and risks are made available. It was only made available to councillors after I asked for it, which was after the decision had been taken.
“It should have formed part of the business case. We have had a couple of examples recently, like Brexit, where the government published the full legal advice. I think if politics has told us anything at the moment, it’s that being open and up front about these things is important.”
The problem-hit first phase of the project included legal costs of £8.1m. The £378,338 legal advice bill could rise as the project continues.
Liberal Democrat Cllr Kevin Lang said: "The tram extension is the biggest and arguably most controversial project being undertaken by the council. It is vital that the decision making around the project is open and transparent.
"There are good examples of where legal advice has been published so the public can understand the basis upon which decisions have been taken. SNP and Labour councillors running the council need to publish as much information as they can, especially given the strong and differing views which people across the city have on the project."
Cllr Lesley Macinnes, transport and environment convener, said: “The council has a duty to safeguard its legal position and we therefore maintain a confidentiality clause around any legally privileged advice we are given.
“The trams to Newhaven final business case was developed with extreme care and rigour, learning the lessons of what went wrong previously and arriving at a robust case for completing the route to Newhaven. The final business case has been fully audited, both externally and internally, and has been held up as an example of best practice by John Baggs, a veteran light rail industry expert, who praised it as the most closely scrutinised project he’s come across.
“Expert legal advice was a vital component of developing the final business case and it’s entirely right and proper that this advice remains confidential in order to protect the council’s – and therefore the public’s – interests.”