Council chiefs at the Guildhall are being urged to hold an update on the £10.25 million Cobblers loan recovery in public after applying to hold a part of a meeting behind closed doors.
The authority loaned Northampton Town the funds throughout 2013 and 2014 to revamp Sixfields Stadium and progress plans for a hotel on the site.
But in 2015, workers downed tools midway through the east stand renovation and it soon emerged the football club had not been making the loan repayments.
In November that year, the council wrote off the loan to the Cobblers when Kelvin Thomas took over the club and received cabinet approval to set aside £950,000 for legal fees to chase the money.
But a report by auditors KPMG last June revealed the authority had not recouped any of the loan, despite committing a large proportion of the £950,000 to the cause.
The council's cabinet is set to discuss an agenda item entitled "recovery of Northampton Town Football Club loan" on April 25.
But the authority has applied to exclude members of the public from that part of the meeting.
Liberal Democrat parliamentary candidate Jill hope, the former county councillor for Sixfields, has lodged a formal objection.
"What is being scrutinised here isn’t so much the £10.25M, but the £950K that was set aside to try to recover the loan, most of which has apparently been spent, with no signs of a penny being recovered," she said.
"It is unreasonable and unacceptable for the review to be held in secret. The public is entitled to know how money is being spent and exactly what has been achieved.
The borough council's opposition leader, Councillor Danielle Stone (Lab, Castle) has taken a similar view.
She told the Chronicle and Echo: "this is public money we are dealing with - whatever they need to put to the cabinet, I think they should say in public.
"If they need more money to fight the legal case, we need to know."
Under the Local Government Act, a meeting can be held in private if not doing so interferes with the "investigation or prosecution of crime".
A police investigation into financial irregularities surrounding the loan was also launched in November 2015 and is still ongoing.
A council spokesman said: “We cannot comment at this time because this is a live court case and an ongoing police investigation.”
Last year, when it emerged the council had already spent the best part of £1 million chasing the money through legal fees and a forensic accountant, former Northampton South MP Brian Binley said it was time for the authority to cut its losses.
"Whatever the situation is, I would urge the borough council to do their best to hold an open discussion on the matter," he said yesterday.
"Unless they are being advised by the police to hold it in private.
"If that is the case they should be open and honest about that as well."
Members of the public can contest the decision to hold the meeting in private by emailing firstname.lastname@example.org .
At least five days before the meeting, a further notice will be published of the cabinet’s intention to hold part of the meeting in private.