SETTLEMENT negotiations between the parties to the CountyGlen action are at a critical stage, according to sources close to the discussions.

None of the parties, including CountyGlen itself, was prepared to comment yesterday, but it is understood that agreement may be reached by the end of the week. CountyGlen is suing the businessman, Mr John Carway, and claims he was behind a complex fraud through which the company lost £1 million.

The company is also suing Limerick solicitors Connolly Sellors Geraghty Fitt and Anglo Irish Bank, which were also involved in the transactions.

Sources close to the discussion said that the decision to settle will ultimately rest with Connolly Sellors Geraghty Fitt's professional indemnity insurers. Mr Carway and Anglo Irish Bank would be expected to sue the solicitors, who advised them, if they were unsuccessful in their defences, he explained.

The first action, against Mr Carway, started in February but has been adjourned until April 16th. Mr Carway is challenging the constitutionality of the use of a High Court inspector's report on the fraud as evidence.