Councillors at Chichester have accepted a £1 million peace offering after threatening to sue West Sussex County Council for breach of contract.

The deal brings to an end a bitter war of words after the county agreed to let a developer scrap plans for a nightclub on one of two sites occupied by Chichester High School for Girls.

The club was to have been part of a leisure development.

Chichester district councillors were furious when it was replaced in the plans with a health and fitness club.

They claimed it broke a legal agreement which meant the county would not allow facilities on the site which could harm the district-run Westgate Centre, which also has a fitness club.

They threatened to take the issue to the High Court and at first the county council appeared unwilling to back down.

But yesterday a settlement offered by the county council was approved after a private district council meeting.

The deal includes some land but the bulk of the £1 million will be in cash.

It now clears the way for the sale of the school site in Stockbridge Road, where a six-screen cinema, hotel, bowling alley, restaurants and a pub will also be built.

District council leader Jane Chevis said: "The council is pleased the county has acknowledged its obligation and we have decided the offer was the best result we could expect."

County Hall plans to use the money from the sale of the school, estimated at £5 million, towards the cost of building a new school at the high school's other campus in Kingsham Road.

Councillor Chevis admitted that young people in the city would be disappointed about the nightclub but the district would look at other ways of providing one.