The company behind a luxury yacht marina development in Cornwall has been ordered to pay more than £600,000 after lying about dredging toxic sediment and dumping it in an area of outstanding natural beauty.

A&P Ports and Properties Ltd had insisted no dredging would be required during their prestigious development of Falmouth Marina – despite having already drawn up a tender to do just that.

Yesterday at Truro Crown Court, Judge Christopher Elwen said the company had embarked on a "prolonged" campaign to "mislead".

"There is no evidence of damage to human health but there is certainly the potential," he said.

A&P Ports and Properties Ltd admitted three breaches of the Food and Environmental Protection Act.

A confiscation order was made which requires the company to pay £400,000 by January 14. It was also fined £70,000 in total and ordered to pay costs of £160,000. The company is wholly owned by businessman Paul Bailey, who personally has a 40 per cent stake in the larger A&P group, an arm of which owns and operates Falmouth Docks.

The court heard that the case surrounded the £8.8 million project to create a 290-berth marina at Falmouth, a scheme unveiled in 2006 which required the demolition of two wharves dating back to the 1930s.

Andrew Oldfield, prosecuting, said the seabed under the wharves had not been dredged since 1938 and the silt contained poisonous heavy metals and toxins such as the biocide TBT, which experts say is the most toxic substance ever deliberately introduced into the marine environment.

He said A&P Ports and Properties had discovered that dredging would be required, but fearing the costs of having to safely dispose of the material or being forced to undertake a time-consuming environmental impact assessment, the firm kept the crucial information to itself.

In April, 2007, an employee estimated that 9,700 cubic metres of material would have to be removed from the wharf area.

Mr Oldfield said A&P Ports and Properties Ltd issued a tender for the demolition of one wharf which required the removal of silt beneath the structures, but did not mention that it was highly contaminated.

"A&P Ports and Properties Ltd had taken the decision and decided to do exactly what agencies like Natural England had feared the most, to dig out and remobilise contaminated silt without any precautionary measures," he said.

The court was told that safely removing the contaminated sediment had been estimated at costing £1.24million. In July that year, the former Carrick District Council granted conditional planning permission.

In response to a number of objections, including from the Environment Agency and Cornwall County Council, A&P Ports and Properties maintained dredging would not be required.

"A&P Ports and Properties Ltd employees were telling the agencies one thing whilst doing precisely the opposite and had already contracted a company to remove the silt," said Mr Oldfield.

He added: "The failure to disclose was intentional. A&P Ports and Properties Ltd had the problems at the forefront of their minds and were aware the likely consequences would mean further delay and significantly higher costs."

The deception was only spotted when an inspector from the Marine Fisheries Agency (MFA) visited the site and saw a digger at the wharves lowering a bucket into the water and shifting the silt.

The method was captured on video tape and condemned by Natural England as "the worst possible way" of moving toxic sediment around.

When challenged, said Mr Oldfield, A&P Ports and Properties "deliberately attempted to mislead the MFA."

"Lies were told. This evasive behaviour reveals A&P Ports and Properties knew it should not have been dredging contaminated sediment. They had been caught, in short."

Speaking in mitigation for A&P Ports and Properties, Christopher Parker QC said the company wanted to issue a genuine apology for its actions. He said that A&P Ports and Properties had entered a guilty plea at the earliest opportunity and accepted the prosecution's case.

He said that no harm had been identified as a result of the firm's action: "There is no quantifiable damage, although I recognise that the absence of damage is not a kind of let out."

Mr Parker said that as a consequence of the case, A&P Ports and Properties Ltd had suffered "public disgrace."

A spokesman for the Marine Management Organisation, the successor to the MFA which brought the case, said: "This was an important environment case for the MMO because the offences took place in such an environmentally sensitive area with the potential for serious damage to the marine environment."

He added that the case should act as a deterrent to anyone tempted to break the law designed to protect the marine environment.

The fate of four individuals charged as part of the same investigation will be determined at a hearing next month.