Publication of the findings of an investigation which began in 1997 into possible professional misconduct by accountants first revealed in the McCracken tribunal is expected to be further delayed following a new legal challenge.

Solicitors acting for retired former Deloitte & Touche managing partner Mr Paul Carty and the Deloitte & Touche firm have informed the Institute of Chartered Accountants (ICAI) they are seeking a judicial review of certain decisions and procedures of the Blayney Appeal Committee.

A statement from Mr Carty and Deloitte & Touche said they were asking the courts to interpret the institute's old rules and procedures, particularly as applied to their cases.

These are the rules which were in force in 1997 when the investigation began although they have since been re-written.

The ICAI, which has undertaken to publish the Blayney inquiry findings, said it would vigorously defend its position in the High Court next Monday. ICAI chief executive Mr Brian Walsh described the latest legal move as a serious financial challenge to the institute and a very serious challenge to the current regulation of the profession.

"We are determined to conclude this process," Mr Walsh said in a letter to the institute's 12,500 members yesterday.

A special meeting of ICAI's 23-member governing council has been arranged for Friday, April 12th to "discuss the implications of this challenge and the strategy to be adopted in combating it".

The statement from Mr Carty and Deloitte & Touche said both were "taken aback" that the ICAI would issue a statement ahead of a court hearing. It said Mr Carty and the firm had, since 1997, "co-operated fully with the Blayney committee and subsequently with the appeal committee".

Mr Carty has already got a High Court order restraining the Blayney Appeal Committee and the ICAI from proceeding with his appeal until after April 30th. Deloitte & Touche has said it would seek a similar order unless the Appeal Committee agreed not to proceed with a hearing of its appeal planned for next Tuesday.

The Blayney Appeal Committee was set up in June 2000 when some of the findings of the Blayney Committee of Inquiry - established to investigate possible professional or business misconduct by ICAI members on foot of revelations at the McCracken tribunal about payments to politicians by Dunnes Stores - were appealed.

Set up in September 1997, the Blayney committee produced an interim report in April 1999 stating that a prima facie case had been established. Chaired by the retired Supreme Court Judge, Mr John Blayney, the committee then indicated it wanted to consider all relevant evidence from the Moriarty tribunal - which was following up the work of the McCracken tribunal - before completing its report.

In May 2000, it completed its report. But it was not published because of appeals by some of the members and member firms involved. The ICAI has not disclosed which parties have lodged appeals. An appeal committee was established in June 2000 to hear the appeals, chaired by Mr Hugh Kennedy QC and with former Arthur Andersen partner and barrister Mr John Hennessy and former ICAI president Mr Maurice Tempany as members.

In the letter to members yesterday, Mr Walsh said the latest proceedings "represent a serious financial challenge to the Institute". Stating he believed the Institute had complied fully with all proper procedures, Mr Walsh said the Blayney Inquiry and subsequent appeal had cost ICAI about €3 million over the last four years.

"This outlay has severely impacted on the institute's financial reserves and defending these proceedings will impose further costs. But the institute is determined that the integrity of its special disciplinary scheme must be defended," Mr Walsh told members.

The McCracken tribunal investigated payments by Dunnes Stores to politicians, including the former Taoiseach, Mr Charles Haughey, and former minister, Mr Michael Lowry. It found Dunnes Stores had paid £1.3 million to Mr Haughey. Deloitte & Touche and Oliver Freaney were joint auditors to Dunnes Stores and were represented before the McCracken tribunal.

Mr Carty, who was a witness at the McCracken tribunal, was questioned by the Blayney committee along with the current Deloitte & Touche managing partner Mr Pat Kenny who gave Mr Haughey tax advice. Members of Oliver Freaney and partner Mr Noel Fox were also questioned by the committee at the hearings which took place in private.

Oliver Freaney declined to comment on the Carty/Deloitte appeal yesterday but is understood to be participating in the current ICAI appeal process.