The Moqhaka municipality, based in Kroonstad, was on Thursday ordered to collect the money, which it gave to several political parties to fund their 2009 election campaigns.
The Freedom Front Plus brought the court application after it repaid its share of the money, but other parties did not.
Free State FF Plus MPL Wouter Wessels said R380,000 was given to the ANC, R70,000 to the DA, R20,000 to the APC and FF Plus each, and R10,000 to the ACDP.
The Public Protector found in a report in April 2012 that the payments were unconstitutional, unauthorised, and wasteful expenditure. It urged the executive mayor at the time to get the money back.
The town council agreed that the money had to be repaid by July 2012. The FF Plus paid its share back on July 23, 2012. The African National Congress, Democratic Alliance, African People’s Convention and African Christian Democratic Party, however, ignored the request.
Wessels said if the manager refused to adhere to the order he would be in contempt of court.