The company lodged a proposal in 2011 to open a 556,000 ton open cut coal mine at the Bradley site in County Durham, in the northeast of England.

The Durham County Council rejected the proposal and its stance was later upheld by a planning inspector, according to BBC News.

UK Coal’s legal representative Timothy Corner QC told the court on Wednesday that the planning inspector had misunderstood government advice and described the decision as "unreasonable and perverse".

Opponents of the proposal have described the appeal as “desperate”, the BBC reported.

Anti-mine campaigners gathered outside the court to urge the decision be upheld, accusing the coal company of not listening to the local community or respecting their decision.

The legal action occurs amid speculation the company may be considering liquidation or nationalisation after a fire at its Daw Mill mine forced the site’s closure and left the company with cashflow problems.

Discussions to determine the future of UK Coal are underway between the government, the company and relative trade bodies.