Council says the grant is "a huge milestone" for the redevelopment of the Manor Leisure Centre.
A council acts after the existing contractor for an £18m revamp ceases trading.
Olga Malolepsza says is already paying the council £500 for a 12-month contract for a pitch.
A council leader says it is "being held over a barrel" by another local authority.
Demolition work ground to a halt in January after vibrations caused the adjoining building to shake.
Residents say the £8.4m regeneration of the Fenland town has been a "catalogue of errors".
The council thinks again having previously told the restaurant its illuminated signs were too much.
A public health report says the regulatory system concerning Saxon Pit "is not always joined up".
A council says residents should be encouraged to take items to charity shops or recycling centres.
