LIVERPOOL Council is still owed £175,000 in unpaid business rates by collapsed department store Lewis’s.

Financial experts are currently in the process of liquidating Virgo Retail, which ran the store in Ranelagh Street and had debts totalling £10m.

In the months ahead of its collapse in May 2010 after 154 years in business the famous store had racked up arrears of £300,000.

But Vergo Retail had managed to pay off some of the debt by the time the firm went bust, leaving it £175,000 in the red with the council.

Non-preferential creditors, which includes the council, were owed nearly £7m by Vergo Retail, and are not expected to receive anything once the administration process is complete.

Liverpool council leader Joe Anderson said there was little the council could do about the situation.

"It’s annoying but it is sadly a reality of life and something we cannot change."

The empty Lewis’s building is set to be transformed into a hotel as part of the £200m leisure and retail development known as Central Village.

The scheme by developers Merepark extends into Bold Street, Ranelagh Street, Renshaw Street and derelict land behind Central Station.

Work is currently underway at the Lewis’s site and completion is expected by the end of 2012.