A six-month row over an unreturned deposit for a cancelled fundraising event had led to tension between Galgate Conder Cougars and bosses at The Crofters Hotel.
But now the misunderstanding has been resolved and the owners have promised to refund the money in full.
Club officials approached The Courier claiming staff at the hotel had refused to return the £300 deposit for a sportsman's dinner function which they had booked earlier this year.
Club secretary David Brown claimed that he had cancelled the event in sufficient time due to poor ticket sales, and that although he had written to The Crofters to request the deposit back, he had received no response.
He also tried to transfer the deposit to two other functions at the hotel, including a birthday party for his 12-year-old daughter, but this was also refused.
David, who has run the club for five years, said: "The club was struggling financially in the first place - the £300 was quite literally every penny that we had in the bank.
"We are constantly trying to raise money to keep it going. We've got bills to pay for the lights, kit and sports equipment to buy. It costs quite a lot of money.
"I understand that they had reserved an evening for us, and that they could have given it to someone else, but I thought that they could have been a bit more sympathetic."
The club's members, who are all aged 10 to 16 years old, had been planning a sponsored walk in January, which was originally organised to raise money to replace the lost deposit.
But after an approach from The Courier this week, bosses at the Crofters have said they will refund the full deposit amount.
Nicola Cheetham, co-owner of the Crofters Hotel, said: "The Crofters Hotel attaches great importance to its relationships with local community organisations and always does its best to provide a very high standard of service to them.
"This particular event, a Sportsmen's Dinner, was cancelled at a mere three days' notice, leaving us significantly out of pocket because of other business we could have attracted on that night.
"Our terms and conditions clearly state that deposits are non- refundable in the case of late cancellation. That is the reason why businesses of all kinds request deposits in the first place.
"Nevertheless, as a goodwill gesture and a further sign of our flexibility and customer service we are refunding the deposit in full to Galgate FC. The Crofters Hotel looks forward to welcoming the club's members, families and friends to many events in future."
David added: "A lot of people spend a lot of time trying to raise money for kids to get them off the streets and it is a nice gesture that the Crofters have decided to give the money back and now bygones will be bygones."