The village of Princetown sits surrounded by the desolate beauty of Dartmoor national park. It should, in theory, be a hub for the more than 2 million people a year who come to explore the bogs, granite tors and windswept moorland that in part inspired Sir Arthur Conan Doyle to write The Hound of the Baskervilles.

Today it more closely resembles a mining community after the pits closed. Dartmoor prison, which provided jobs for many residents, has been closed since last summer after the discovery of dangerous levels of radon gas. The prison museum, a former tourist attraction, is also closed, and the prison officers’ club is derelict. Quiet streets bear testimony to the ghostly finger of financial fate.

The fate of the prison has not dented the profits of the Duchy of Cornwall, however, which owns the land the village sits on. The taxpayer is still paying Prince William’s estate £1.5m a year to lease the abandoned prison, and is set to do so for another 24 years.

The government may soon face an even bigger bill: about 500 former inmates and staff who worked at the jail are planning to sue the Ministry of Justice, alleging they have been exposed to radon levels up to 14 times the legal limit, the Observer can reveal.

Radon, a naturally occurring radioactive gas in soil and rocks, is the second leading cause of lung cancer after smoking and is conservatively linked to about 5% of lung cancer cases in the UK a year, causing more than 1,100 deaths, 3.1% of the total annually.

Solicitor Mladen Kesar is representing the group. Of those bringing the case, 10 people have had cancer and, of those, two have since died. Others report symptoms they believe are linked to radon poisoning, including shortness of breath, wheezing and nosebleeds. Many worry that it may take several years for potential health effects to show, including lung cancer, stomach cancer and emphysema.

Kesar compared his clients’ time in the jail to sitting inside the Chernobyl nuclear reactor. “I can’t prove causation yet, but that doesn’t mean I won’t be able to prove it,” he said.

Lindon Ball, 31, from Torquay, who was already asthmatic, has suffered more severe lung and heart problems since serving time in Dartmoor in 2019 and 2020 for possessing an unlicensed firearm. During the Covid pandemic, he and other prisoners were locked up for more than 23 hours a day. “The prison is a bad, bad place,” he said. “They treat you like a dog. I’ve had breathing problems. I feel like I’ve got lumps in my lungs. I’ve got heart problems as well.”

The fate of the prison has not dented the profits of the Duchy of Cornwall, however, which owns the land the village sits on. The taxpayer is still paying Prince William’s estate £1.5m a year to lease the abandoned prison, and is set to do so for another 24 years.

The government may soon face an even bigger bill: about 500 former inmates and staff who worked at the jail are planning to sue the Ministry of Justice, alleging they have been exposed to radon levels up to 14 times the legal limit, the Observer can reveal.

Radon, a naturally occurring radioactive gas in soil and rocks, is the second leading cause of lung cancer after smoking and is conservatively linked to about 5% of lung cancer cases in the UK a year, causing more than 1,100 deaths, 3.1% of the total annually.

Solicitor Mladen Kesar is representing the group. Of those bringing the case, 10 people have had cancer and, of those, two have since died. Others report symptoms they believe are linked to radon poisoning, including shortness of breath, wheezing and nosebleeds. Many worry that it may take several years for potential health effects to show, including lung cancer, stomach cancer and emphysema.

Kesar compared his clients’ time in the jail to sitting inside the Chernobyl nuclear reactor. “I can’t prove causation yet, but that doesn’t mean I won’t be able to prove it,” he said.

Lindon Ball, 31, from Torquay, who was already asthmatic, has suffered more severe lung and heart problems since serving time in Dartmoor in 2019 and 2020 for possessing an unlicensed firearm. During the Covid pandemic, he and other prisoners were locked up for more than 23 hours a day. “The prison is a bad, bad place,” he said. “They treat you like a dog. I’ve had breathing problems. I feel like I’ve got lumps in my lungs. I’ve got heart problems as well.”

The duchy, for its part, appears to be putting together a plan to revitalise the village. It has given the youth club money for six months while it searches for alternative funding and is understood to be developing a wider strategy for the area. A spokesperson said it was working with the national park on a plan to turn the visitor centre into something that would support the local tourist industry. “We take our role seriously,” she said.

Neither the duchy nor the national park would give further details about the plan for the visitor centre, one of three on Dartmoor, but the Observer understands that they may turn it into a youth hostel.

The prison service, meanwhile, said it was still monitoring radon levels at Dartmoor prison and would not comment on the legal action. “We continue to take advice from specialists to explore how it can be reopened as quickly as possible,” a spokesperson said.