The suspended chief executive of the Irish internet domain registry, Mr Mike Fagan, resigned from the company yesterday after reaching a legal settlement.

Mr Fagan was suspended in October 2002 pending an investigation of the management of the financial affairs of the company.

A bitter stand-off between the parties continued until this week when IE Domain Registry Limited (IEDR), the firm that operates the Republic's .ie internet domain name system, invited Mr Fagan to a disciplinary hearing.

It is understood the two parties reached a legal settlement prior to the hearing taking place.

In a statement the registry said it had accepted Mr Fagan's resignation with immediate effect. The current chief financial controller of the registry, Mr David Curtin, had been appointed acting chief executive, it added.

Prof Seán Scanlan, chairman of the registry, said he was satisfied with the outcome. "It achieves closure on what has been a difficult time for the company. The IEDR is now free to focus on serving the needs of the Irish internet community," he said.

Mr Fagan said he was happy with the settlement he received, which included a financial payment and a reference.

However, a spokesman for the registry said last night the only payment he received was two months salary in lieu of notice.

The bitter 13-month dispute caused considerable alarm in Government, which feared it might hurt Ireland's standing as an e-commerce hub.