UNPAID parking fines totalling around £6.5 million have been cancelled by the city council following a legal blunder.
Transport chiefs have been forced to stop chasing Edinburgh's worst parking cheats, leaving the authority with a massive financial black hole.
But while those who used underhand techniques to dodge parking fines are now off-the-hook, the council insists that thousands of residents who did pay fines they did not legally have to will not receive a refund.
Campaigners today urged people to mount legal challenges to win back their cash.
The Evening News revealed late last year that all parking tickets issued up until June 2006 were technically "illegal", because they did not bear both the date of issue and date of the offence as required by UK law - regardless of the offence.
It emerged today, following a Freedom of Information request, that all debt owed prior to that date has now been wiped clean.
Sheriff officers are being told to stop chasing all outstanding offences dating back to decriminalisation in 1998 - understood to total around 70,000. The council has also abandoned pursuing 4327 fines it had not yet passed to sheriff officers.
Having failed to pay the 30 on time the vast majority of the motorists involved had seen their outstanding fines rise to 90.
That means motorists such as Scotland's biggest parking cheat - Tollcross handyman Sandy Gillespie - who has bragged of running up 80,000 in unpaid fines, will no longer be chased for the money he owes. Last year, former council leader Donald Anderson vowed to pursue him for "every penny".
Opposition politicians today said the situation was "very disappointing", and warned of "financial chaos" if all fines have to be refunded, but a council spokeswoman defended the local authority's position.
"Tackling persistent offenders such as those who keep flouting parking rules is something we take very seriously," she said.
"Our tickets were based on guidelines issued by the Department of Transport, which were taken in good faith and were believed to be correct, along with other councils.
"However, this has proved to be wrong and we have taken external legal advice, which has forced us to write off a number of unpaid tickets issued before June 1 last year."
The issue was first raised by the Evening News last May, when one of the UK's leading parking campaigners - Barrie Segal - highlighted an obscure point of law that Edinburgh's tickets failed to comply with.
At the time, the council expressed full confidence in the set-up - but still changed the wording on tickets within a week. All current tickets are now compliant with the law.
Edinburgh parking chiefs do not believe motorists who paid their tickets are due any cash back because they have effectively accepted their guilt, although the legal position remains unclear.
A family in London has already won back all the money they paid out in fines after mounting a legal challenge.
Campbell Deane, of the Scottish legal firm Bannatyne Kirkwood France, said the most likely scenario in Edinburgh would see the council choosing not to contest any claims - given the relatively low cost of a refund - although he thought many residents would be put off starting a legal fight over just 30. However, he said if the council chose to mount a challenge in court - and lost - a written judgement could force the local authority to pay back millions of pounds to motorists.
Mr Segal, who runs the AppealNow.com website, said today: "I think the council should pay back all the tickets - they say people have accepted their guilt, but how can you [be guilty] if the fine was never valid?"
Tory transport spokesman for Edinburgh, Councillor Allan Jackson, said today: "It's very disappointing to find out today that the council has been wrong, and a substantial amount of money can no longer be pursued."
The Road Traffic Act of 1991 says parking tickets must carry both the date the offence was committed and the date the fine was issued. This is important because fines in some parts of the UK - such as London - can be sent out in the post by officials studying CCTV evidence at a later date.
Although all tickets in Edinburgh are handed out at the same time as the contravention, until June last year there was no specific reference to the "date of issue" on the city's parking tickets.
This was amended following an Evening News story.
In recent months, a High Court judge in England ruled that tickets issued by Barnet council in London were not valid. Independent Scottish parking adjudicators then wrote to councils across Scotland to warn that all parking appeals would be successful if two dates are not on the penalty notice.