ONE OF the Irish Life & Permanent shareholders suing the Government over the recapitalisation of the bank and the wiping out of their investment has abandoned his legal challenge.

The High Court was told that Nigel Bunting, Ipswich, England, had settled his action aimed at overturning or varying the orders obtained by the Minister for Finance last month.

The orders allowed the Minister to inject €2.7 billion into Irish Life & Permanent giving the State a shareholding of more than 99 per cent of the company and control of a fifth Irish bank.

No payment was made to Mr Bunting under the settlement, a spokesman for the Minister said.

Lawyers for the Minister told Mr Justice Roderick Murphy that Mr Bunting’s action had been settled. As part of the settlement, it was agreed Mr Bunting would abandon his challenge against the decision to recapitalise the bank.

Mr Justice Murphy agreed to strike out the action with no orders for costs. No further details of the settlement were revealed.

A spokesman for the Minister said Mr Bunting and related parties had agreed not to take any further action against the State.

Two other challenges, taken by investment fund Horizon Growth – which acquired six million shares between February and July 2011 – and Malta hedge fund Scotchstone Capital, in conjunction with other individuals, were proceeding, the Minister’s spokesman said.

Mr Bunting had claimed the Minister’s actions were unreasonable and unlawful, that the shareholders’ stake in IL&P had been overwhelmingly diluted and their rights “have been abrogated without any consultation”.

Mr Bunting told The Irish Timeslast week that he was "very upset" that his interest in Irish Life & Permanent was being diluted by more than 99 per cent. He and his family had amassed their three million shares earlier this year. His only recourse was to take a legal action within five working days of the alleged "expropriation" of his investment under the Credit Institutions Stabilisation Act 2010.