NEWTON -- Selectmen and town residents are dismayed by a Rockingham County Court jury's award of $400,000 in damages to the Nicol Family Farm Partnership in a lawsuit over a local recreational trail.

The decision, handed down late last week, gives the town the disputed ownership of the so-called "Peanut Trail" but says it must pay the $400,000 to the Nicol family for past damages and potential future damage to their property, which adjoins the trail.

"I think it is a lose-lose situation for both the town and for the Nicols," said Selectman Mary P. Marshall. "They had wanted the land and the town now has to come up with this large amount of money. Nobody wins. We are all losers."

Selectman Norman P. Harding said, "I never expected the financial settlement to be so large. I think it's going to be interesting to see how we are going to come up with money we need to cover the past damages and potential future damages."

The Nicol Family had brought suit against the town in an attempt to get the trail land declared farmland, claiming the town had no right to an old railroad right-of-way it had acquired to develop a recreational trail. The Peanut Trail was named for the "Peanut Trains," which once ran on the spur line carrying coaches and later cars manufactured in Amesbury, Mass. The vehicles were covered with tan canvas that made them look like giant peanuts.

The disputed portion of the trail crossed about a half-mile of farm property. The dispute arose in 1998 after riders strayed from the trail and tore up meadowland and fields with off-highway vehicles, resulting in crop damages and erosion.

That suit was filed after voters rejected several attempts to allow town officials and farm owners to negotiate a settlement that originally would have rerouted the trail to the edge of farm property.

Selectmen say they will wait until they have received legal advice before deciding what step to take next. Members of the Nicol Family were not available for comment.

Selectmen have said the town has paid almost $50,000 so far and additional legal costs will likely reach about $75,000. Selectmen say those costs are not covered by insurance, and that the town's insurance is not expected to cover more than about a third of the $400,000 in damages.

The land ownership issue was settled as a point of law while the money damages to the farm owners -- $150,000 for past damages and $250,000 for potential damages -- were determined by a jury.

"We won, but we lost," said resident Jerry Lacroix. "The land is ours -- and now we get to give them $400,000. I don't think they are entitled to it, and if they are, does that mean if they do develop the land will they return the $250,000 for their future losses?" Some residents said they rued the decision.

"The train track was there before Nicol Farm, wasn't it?" said resident Jim Mulchahey. "We all ready banned motorized vehicles from that section of the trail after they complained about the damage, haven't we? I don't think there was that much damage. The town can't afford to pay it and we may have to give the trail back to them."

The police department has acquired off highway vehicles for patrolling town trails and has applied for a grant to help provide officers with the training they need to police the trails.

The Mulchahey children have used the trail for bicycle riding for several years and always stayed on trail property, their parents said.

"My kids won't be able to ride their dirt bikes out there on the Peanut Trail," said resident Dawn Mulchahey. "I have three boys and I feel safe when they are riding on a trail. I don't feel they are safe when they are riding on Route 108 where there is so much traffic. I think it should be available for Newton residents, but it's a ton of money."

Other residents said they do not understand the wisdom of the court's decision.

"I don't think this is what I voted for," said Linda Levy. "I am sorry the town is responsible for paying all that money. I don't think I was voting for that. I didn't want the town to be responsible for the land if it belongs to somebody else," she said.