The family are in the dark about their much-loved pet Lilly, who went walkabout in Crossgates when it was being looked after by relatives.
Self-employed decorator Kevin Woodward has submitted a formal complaint to Fife Council over the matter and says it is "torture" trying to explain to his kids why Lilly is still not home.
While Kevin was in New York on holiday with his wife, their four boys were staying with their grandparents along with their pet, a seven-year-old Lhasa Apso.
The dog got out of the garden in Dunfermline Road on the morning of Tuesday 11th October and by 2pm the grandfather contacted Union Farm Boarding Kennels near Cupar where she had been taken by the council.
He was told by the kennels that the dog had been classed as a stray but as a pensioner did not have the £60 fee required to pick her up that day.
When Kevin returned home from holiday he went to the kennels but did not have the cash required - which by then was up to £120 - for the dog to be released.
"The woman would not even let me see the dog so it has never been formally identified as our pet," he said.
"I run my own business and the normal thing would be to let you take the dog and send you an invoice which I would have paid the next week.
"It was just because we were straight back from holiday that I couldn't pay on the spot.
"I became a bit irate when I wasn't allowed to see the dog. The woman told me that the legal position was that after seven days the dog became hers and could be re-homed.
"What happens if someone goes on holiday and their dog is picked up? It could be sold off by the time they get home."
The situation is particularly upsetting for the family's four boys, aged 11, 10, four and two (pictured with Lilly).
Kevin added, "Lilly is a pedigree Lhasa Apso worth £500. This is our family pet and the family are all very upset at what's happened.
"We don't even know if it's still at the kennels or been re-homed.
"The kids ask me every day what's happening about Lilly and it's torture.
"I just have to tell them I'm doing everything I can. By them holding on to the dog the bill goes up every day.
"It's probably up to over £300 by now."
Local councillor Alex Rowley said, "The council need to accept a bit more responsibility for dealing with members of the public rather than what would seem to be the current practice, which is once the dog is handed over to the private kennel it is nothing to do with the council. In this case the family have made every effort to get the dog back which went missing while they were on holiday.
"Given the current economic climate I think it is wrong that the meter has been allowed to keep running, clocking up a massive bill for the family and indeed now posing a real threat to the future of the family pet."
Roddy Mann, council operations manager, said, "When dogs are picked up they are taken to one of two private kennels in Fife who are contracted to look after stray dogs and try to trace their owners or re-home them.
"This arrangement provides a public service in terms of keeping our streets safe but the organisations involved are not charities and costs need to be recovered.
"Part of being a responsible pet owner is ensuring animals are secure and, while our wardens and the kennels are happy to keep lost animals safe and try to reunite them with their owners, by law the owners are responsible for meeting the costs involved.
"When someone collects a lost dog, the kennel operators collect a £50 fee on behalf of the council, which goes towards the dog warden service, plus £10 per night for their kennelling costs.
"This is the same for any dog owner whose pet is recovered and how the companies arrange for customers to make payments is their business.
"The guardian and kennel operators spoke at an early stage and discussed the fee structure and the guardian chose to leave the dog in the kennels until the family returned, acknowledging that £120 would be required to collect the dog at this stage.
"The kennels are entitled to ask for the money that is owed to them."