Work has started to make a playing field safe after munitions from a military barracks were found.
The parish council in Weedon Bec, Northamptonshire, feared bankruptcy over a £1m bill to clear the area of the grenades, found in July 2016.
Now the Ministry of Defence has given the council £500,000 to pay for the clearance work but not site security.
Zoe O'Toole, parish council chairwoman, said households must still pay about £250 in extra council tax each year.
A play area mound containing waste, including explosives, from nearby Weedon Barracks has needed 24-hour security, which the council has had to fund.
"I have lost hours and days of sleep over this. It's horrible as we have had to increase council tax in the village and that has made people cross," Ms O'Toole said.
The contractors who have started to clear the site said it was "not unusual to find ordnance on brownfield sites" but that it was usually German, from World War Two.
"In this case, it is British," a spokesman for contractors Symbiotic Solutions said.
The firm hopes to clear the site by February to allow it to return to use as a play area.
The MoD said it had an "on-going commitment to remove ordnance should it be encountered".