The Supreme Court has begun hearing an appeal by two mining companies against the High Court's rejection of their claim for £2 million (#2.54 million) in damages arising from an unlawful ban on mining in Co Mayo.

Glencar Exploration and Andaman Resources are seeking to recover from Mayo County Council - which imposed the ban on mining - monies which they had spent on exploring for gold in townlands near Westport. The companies had secured prospecting licences from the then Minister for Energy.

The mining ban was inserted in the Mayo Development Plan which was approved by the council in 1992. The ban applied to one seventh of the area of Co Mayo and was overturned by the High Court in December 1992. The court found the ban was illegal.

The companies then sued the council for damages but the High Court, in a judgment delivered by Mr Justice Kelly in August 1998, found they were not entitled to damages.

Yesterday, in opening the Supreme Court appeal against the High Court decision, Mr Paul Sreenan SC, with Mr Rory Brady SC, for the companies, said the relationship between them and the Council was of sufficient proximity to create a duty of care.

The council had received a ministerial letter indicating the proposed ban was contrary to Government policy on mining and setting out the consequences of including a ban in the development plan.

The High Court had not explained why a finding of duty of care was not just and reasonable in the circumstances of the case, he said.

The appeal continues today.