The former special adviser to Mr Charles Haughey, Ms Catherine Butler, has settled her long-running employment dispute with property development group Ballymore Properties.

Ms Butler began her legal battle with Ballymore a year ago when she was allegedly dismissed by the property company because of her imminent appearance at the Moriarty tribunal's investigations into Mr Haughey's finances.

Ms Butler worked as special adviser to Mr Haughey from 1987 to 1992 while he was Taoiseach. She worked in a number of other capacities until March 1998 when she joined Ballymore Properties as assistant to managing director Mr Sean Mulryan whose company has extensive property interests in Ireland and Britain, both in housing and office and apartment development. Ms Butler's salary with Ballymore was £60,000 (€76,184) a year.

In an affidavit to the High Court in July last year, Ms Butler said she had advised Mr Mulryan that that she had been notified by the Moriarty tribunal that she was required to attend for an interview and/or to co-operate into the investigation into Mr Haughey's affairs.

On July 26th last year, Ms Butler said that Mr Mulryan had said: "Well, we might as well have this conversation now - I have a business to run and I have to protect my business and my reputation and if you're going to be called before Moriarty, it'll have huge implications for me - never mind reading about you in the newspapers, which was very complimentary by the way - I cannot employ you or have you associated with my company - well, not publicly anyway - so I want you to become a self-employed consultant."

Ms Butler said she was horrified by this and told Mr Mulryan that no suggestion of impropriety was being made against her. She said Mr Mulryan had responded: "I know you have done a great job for me and have helped me with certain named projects and a named individual and all that, but the fact of the matter is that you are guilty by association." She had asked what that meant and he said: "Guilty by association having worked for Haughey."

A High Court order restraining her dismissal by Ballymore was subsequently lifted after Mr Mulryan and Ballymore gave an undertaking not to terminate her employment before September 8th last year.

It now seems that it has taken Ballymore and Ms Butler more than a year to settle their dispute. The settlement sees Ms Butler leave Ballymore to pursue "new interests" while she will continue to act as a consultant in undisclosed special projects.

A spokesman for Ballymore was unable to say whether Ms Butler had received a financial settlement for leaving her £60,000 a year job and said that the company would be making no further statement on the affair. Ms Butler herself was not available to comment on the terms of the settlement.

When Ms Butler appeared at the tribunal, she said that she had destroyed her private diary of her years working alongside Mr Haughey. She said that she had destroyed the diary in the summer of 1998 before being summoned by the tribunal.

"My personal journal contained details of my family life, my personal life, my utmost personal secrets of Charles Haughey, such as the formation of the Coalition government of 1989, where only I and Mr Haughey would have been in possession of certain information." She said that she had destroyed the diaries because "I didn't want to get dragged into the tribunal."

Ms Butler also gave evidence to the tribunal which conflicted directly with evidence already heard from another of Mr Haughey's former private secretaries, Ms Eileen Foy, in relation to the controversial Fianna Fail party leader's account.

Ms Butler said that in 1992, after Mr Haughey had resigned as Taoiseach, she helped Ms Foy to gather the records in relation to the account, pack them in a number of Arnotts shopping bags, and bring them out to Ms Foy's car which was parked at Government Buildings. She also said that during a meeting in a pub in Co Kildare in the summer of 1998, Ms Foy told her she had subsequently destroyed the records.

Ms Foy strongly rejected Ms Butler's evidence. "That's just rubbish," she said.

At the tribunal this week, Mr Haughey said Ms Butler was "super-efficient" but contended that she had been mistaken in some of her evidence.