Birmingham City Council said its £2.7bn contract with Amey to look after its highways until 2035 includes a clause to pay £1,700 each time Amey plants a roadside tree beyond the 70,000 it is contracted to maintain.
The deal made news headlines last week when councillors and campaigners rounded on the costs. Chair of the council's transport and sustainability committee Victoria Quinn said it is "ridiculous" and "reprehensible" in a time of austerity.
TaxPayers' Alliance campaign manager Robert Oxley said: "Contracting out services has to represent value for money, so poorly negotiated contracts should be axed."
But a Birmingham council representative said: "The £1,700 cost would only apply to extra trees above and beyond the existing 70,000. These will be maintained and replaced as part of the contract without extra cost. To date, no additional trees have been planted and so Birmingham City Council has not been charged."
Amey said: "As part of the Birmingham service, we look after trees on the highways network, the cost of which is covered within the agreed contract. On the rare occasion requests are made for additional trees, we have an agreed cost in place. No extra trees have been requested."