A High Court application to lift a stay preventing the implementation of a directive of the electricity regulator governing the sale of electricity to major power users was withdrawn yesterday after agreement was reached between the sides.

The two sides agreed to continue the stay pending the outcome of a judicial review challenge by ESB Independent Energy to the measure. The subsidiary to the State power generator has also made undertakings to maintain "an audit trail" regarding its approaches to customers and related matters.

It also undertook to meet damages which might be incurred by the regulator and ePower as a result of the proceedings in the event of it losing the action.

The focus of the company's challenge will be a requirement in the directive that it clear all contracts with the electricity regulator, Mr Tom Reeves, before their implementation.

On Thursday, the regulator asked the President of the High Court, Mr Justice Morris, to lift the stay granted to ESB Independent Energy by the High Court on December 22nd last preventing implementation of the 10-point directive.

The regulator's application was supported by ePower, a rival independent supplier and a notice party to the proceedings. The ESB subsidiary opposed the application and said, if the stay was lifted, it would seek an injunction restraining any further action on foot of the directive.

The proceedings arose following an investigation by the regulator into claims that ESB Independent Energy, as a result of its close ties with the ESB, was operating at a competitive advantage over its rivals. Following his investigation, Mr Reeves issued his directive.