West Ham and Sheffield United today agreed an out-of-court settlement to end their dispute over the Carlos Tevez saga.

Legal action has been ongoing since the Blades were relegated in 2007, while the Hammers survived due in large part to Tevez’s goals.

The Argentina striker, now with Manchester United, was brought to Upton Park in a deal with compatriot Javier Mascherano but should have been ineligible as the terms of his contract broke third-party ownership rules.

Sheffield United have been seeking a payment from the London club and initially valued their claim at €47.5million.

They insisted that represented the true cost of relegation to the Coca-Cola Championship, but the actual figure agreed between the sides is thought to be substantially lower, with payments to be spread over a five-year period.

The Hammers insisted that the actual cost to the South Yorkshire club was around €5.3million, but they were dealt a severe blow when an independent panel chaired by Lord Griffiths supported Sheffield United’s claims in their initial findings.

Precise details of the deal have not been made available but both sides have declared their relief at resolving the matter.

“Both clubs are pleased to announce that a satisfactory settlement for compensation has been reached which brings the dispute between Sheffield United and West Ham United to an end,” said West Ham chief executive Scott Duxbury and United chairman Kevin McCabe in a joint statement.

The independent panel, chaired by Lord Griffiths, was due to reconvene today to determine a settlement but the clubs instead decided to broker a deal between themselves and the tribunal will now be disbanded.

Duxbury said: “For everyone concerned, the time was right to draw a line under this whole episode. We have had very positive discussions over a number of days with Sheffield United and acknowledge their willingness to resolve this in the best interests of both clubs.

“This now allows us to concentrate on our immediate ambitions, which include a strong finish to the Premier League season and possible European qualification, without any negative impact on our long-term project. We wish Sheffield United well in their bid to secure promotion from the Championship.”

McCabe added: “We are happy and satisfied with the settlement with West Ham. Throughout the finalisation of the terms for the agreement, the discussions were

friendly, co-operative and in the best of spirit with both the Blades and Hammers advisory teams.

“We are two clubs with a fantastic footballing history who now want to move on and focus on the business of playing football — hopefully for us against the Hammers in the Premier League next season. We look forward to a positive ongoing relationship with West Ham at all levels.”