A LONG-running legal dispute that divided a Hampshire town has been settled leaving local taxpayers facing a five-figure bill.

Alresford Town Council has agreed to resolve its battle with former clerk Bill Stevens and agreed to pick up the bill, including legal costs of some £80,000.

One option being considered is to pass the cost on to town council taxpayers in April 2008.

A private briefing for councillors was held this week and a decision will be taken at the next meeting of the council on June 6.

The dispute stems from a private libel action in 2002 between Councillor Robin Atkins, who lost his seat on the council earlier this month, and Mr Stevens.

Cllr Atkins lost the original case and had to pay Mr Stevens about £100,000.

Mr Stevens was unable to recover all of his costs and so claimed the difference of £22,000 from the town council, under an indemnity included in his contract of employment.

The town council contested Mr Stevens' claims, but chose to settle prior to a court case in March this year, following legal advice. Including both sides' legal costs the final bill will be about £80,000, 40 per cent of the council's annual budget.