The settlement agreed yesterday by Murray Consultants could have cost the company up to £3 million, sources said yesterday. The money includes a settlement to Mr Horgan, plus payment of legal fees for both sides which are said to be approaching £1 million. It is understood that Mr Horgan previously refused an offer of around £1 million to settle the case, which has been in train since 1996. Yesterday's agreement will see Mr Horgan's 28.5 per cent stake in Murray's transferred to his former partners, Mr Joe Murray and Mr Jim Milton.

During the dispute both parties had the company valued, albeit some time ago. It is understood that there were considerable disparities between them as to the actual value of the company. Murray Consultants is a highly reputable PR firm, with some blue chip clients, including Independent News & Media, Ryanair, Friends First and Bord Gais. Sources said the company was valued at around £5 million at one stage. However, it has suffered several high profile defections, with some senior staff leaving to form or work for other organisations. PR firms are not valued on multiples of their turnover, but rather on the basis of their fee income. Murray's fee income is said to be in excess of £2 million per annum.

Sources say that much of the company's income is generated by its two partners, Mr Murray and Mr Milton. The company is involved in a range of areas, including event management - it manages the Murphy's Irish Open golf championship each year - and "crisis management". Mr Milton, in particular, is a troubleshooter and adviser for several senior Irish management executives, including Dr Tony O'Reilly, Independent News & Media chairman.

All parties to the dispute resolutely refused to comment on the settlement last night. In a joint statement, the parties confirmed that when the settlement is implemented, all outstanding issues will have been resolved. Mr Horgan is also resigning as a director.