A council dispute named "Sherylgate" is finally over after years of expense to the taxpayer.

Worthing Borough Council leader Keith Mercer said it was a great weight off his shoulders after a joint settlement was reached.

Sheryl Grady, the council's chief executive, went on sick leave in December 2003 and has been paid her full salary ever since, estimated at more than £200,000.

Now, more than two years and four months after The Argus exclusively revealed details of the row, she has received an undisclosed pay-off.

The council said it would be collating the total cost of the saga and hoped to release details in the near future.

A year ago the council revealed legal costs had exceeded £140,000.

In a statement, the council said: "Worthing Borough Council's chief executive (Ms Sheryl Grady) left the council's service on March 15, 2006.

"As a result of her long-term ill health and following medical advice that she is unlikely to ever be well enough to return to her post, Ms Grady has taken early retirement on grounds of ill health.

"The council and Ms Grady have agreed that upon early retirement, all other issues between the council and the chief executive will end.

"The council regrets the time it has taken to resolve matters and expresses concern over the complex and slow statutory process that has to be followed in such cases.

"The council recognises Ms Grady's service over the last 13 years in her various roles and wishes her well for the future."

In January 2005, Ms Grady lost her battle for compensation after taking the council to an employment tribunal, claiming she was the victim of sex discrimination at work.

Ms Grady said she was left too ill to work because of the sexist way she was treated by council officers and Lib Dem former leader Sheila Player.

During eight days of evidence, the tribunal heard Ms Grady was criticised for her appearance, nicknamed Goldilocks and likened to a "bag lady shuffling along the corridors of power".

Ms Grady, 48, who lives in Hove, broke down in tears as she told how her health was shattered by the treatment.

She went on sick leave after the council launched an investigation into her management style. She was accused of bullying, inducing stress, creating an atmosphere of blame and putting improper pressure on staff. Now a settlement has been reached, a separate investigation into the bullying allegations, which Ms Grady denied, has been dropped.

Coun Mercer said: "It is as if a huge weight has been lifted off my shoulders. I will now get on and devote all my energy to being a leader. It has been hugely distracting.

"The overall cost of everything will be made public as soon as it has been computed. The sooner we can get it all out, the better."