Single crystals of the type-I clathrate Ba(8)Ni(3.5)Ge(42.1)square(0.4) (space group Pm3n, no. 223, a = 10.798(2) A, l = 30 mm, slashed circle = 8 mm) were grown from the melt using the Bridgman technique. Their composition, determined by microprobe analysis, reveals a distinctly lower Ni content than previously reported for the lower limit (x = 5.4) of the homogeneity range of the clathrate-I phase Ba(8)Ni(x)Ge(46-x). From single crystal X-ray diffraction data we introduce a crystal structure model that takes point defects (vacancies) square in the Ge network into account. It reveals that both Ni and square accumulate at a single site (6c) and that, as a consequence, the Ge network distorts considerably. Ba(8)Ni(3.5)Ge(42.1)square(0.4) shows metal-like behaviour (drho/dT > 0) albeit with high resistivity at room temperature (rho(300 K) approximately 1 mOmega cm). Together with the low charge carrier concentration of 2.3 e(-)/unit cell at 300 K this is typical of a degenerate semiconductor. The lattice thermal conductivity is distinctly smaller than that of Ba(8)Ge(43)square(3), where the vacancies partially order, and smaller than those of Ba-Ni-Ge type-I clathrates without vacancies, suggesting that disordered vacancies efficiently scatter heat-transporting phonons. We provide evidence that the maximum value of the thermoelectric figure of merit reached in Ba(8)Ni(3.5)Ge(42.1)square(0.4), ZT(680 K) congruent with 0.21, can be further improved by adjusting the charge carrier concentration.