Counsel representing Mr Frank Mulcahy, the former chief executive of the small firms' group, ISME, and his former employers told the Employment Appeals Tribunal (EAT) yesterday that their respective clients had reached a written agreement and the case would not be proceeding.

Details of the settlement were not disclosed but it is understood that £70,000 (€88,882) compensation was the amount agreed, which includes Mr Mulcahy's legal costs.

However, the chairman of ISME, Mr Shay Fitzmaurice, later said the settlement included a 12-month consultancy contract for Mr Mulcahy and he hoped that it would extend longer than a year. He added that any issue of the company apologising to Mr Mulcahy, as previously reported, had not arisen.

He added that he was delighted at how accommodating Mr Mulcahy and his counsel, Mr Alistair Rutherdale, were, saying both sides in the dispute had good negotiating teams.

Yesterday's EAT hearing, originally scheduled for 10.30 a.m., was adjourned for half-an-hour after being adjourned twice the day before. Shortly after 11 a.m., Mr Rutherdale said "an amicable settlement" had been reached and requested that Mr Mulcahy's claim be withdrawn with liberty to re-enter within five weeks.