FORMER Golden Vale chief executive, Mr Jim O'Mahony has relinquished with the company following agreement on a severance package yesterday.

In a statement, Golden Vale confirmed that it had reached an "appropriate" settlement with Mr O'Mahony following a shock decision by its board to dismiss him from his job last month.

Having accepted the deal, the terms of which are confidential, Mr O'Mahony resigned as a director of Golden Vale and as chief executive of its co-op, the statement said.

Speaking to The Irish Times comment on the settlement. Industry sources believe it could be worth about Pounds 750,000, including payment of about two years salary and a pension package.

Mr O'Mahony was dismissed chief executive after the board of directors voted narrowly to remove him. The motion, proposed by Dublin solicitor Mr James Osborne, was fl by eight votes to seven following the controversy over the payment of Pounds 3.1 million in milk super levy payments to the Department of Agriculture.

Mr O'Mahony said he was now looking to buy a business with a number of other investors which would not necessarily be in the food sector. "I am looking forward to working in a business with people who just have one agenda to develop the business. It will be nice to get away from politics," he said.

The announcement came shortly before the regular monthly meeting of Golden Vale's 76 member cp yesterday. The co-op agreed to postpone a decision on Mr O'Mahony's future as its chief executive at its last meeting, telling the plc to agree a settlement with Mr O'Mahony. A proposed vote of confidence in the plc board was not taken at the meeting, following news of the settlement.

The settlement follows weeks of negotiations between legal advisers acting for the former chief executive and Golden Vale. It is understood Mr O'Mahony had rejected an earlier compensation offer from the board, claiming exemplary damages to reflect the damage he feels his dismissal has done to his reputation. As chief executive, Mr O'Mahony is believed to have received a salary, bonus and pensions package worth Pounds 300,000 a year.

Initially, a wide gap emerged between the settlement package being sought by Mr O'Mahony and what the co-op would offer, and a costly legal battle loomed. However, yesterday a brief statement announced that a deal had been reached.

Golden Vale has said it will immediately begin its search for a new chief executive and has employed accountants Coopers & Lybrand to begin the recruitment process.