A manager sacked in a "free hospitality for police" row at a North-East hotel is celebrating an out-of-court settlement with his ex-boss.

Stuart Dyson was dismissed from the Park Head Hotel, in New Coundon, County Durham, last year amid allegations that police officers had been given free drinks, food and cheap rooms.

The hotel's owner John Khan claimed he had lost up to £50,000.

Durham Police launched a criminal investigation and a parallel internal inquiry into the claims.

Mr Dyson said he was innocent and took his case to an industrial tribunal, which was due to hear the evidence in Newcastle earlier this week.

However, Mr Khan elected to make an out-of-court settlement and the tribunal did not go ahead.

Police have also confirmed they will not be taking any action against Mr Dyson on the evidence they have uncovered so far.

Last night, Mr Dyson, who lives at Woodham, near Newton Aycliffe, County Durham, spoke of his relief.

He said: "This has been hanging over my family since September and has caused us great pain and distress.

"Although I am delighted with the outcome, I would have much preferred to have taken my case to the tribunal. I was ready to fight my corner."

Although Mr Dyson has received a "substantial" sum of money, he said: "Taking my case to an industrial tribunal was never about how much compensation I could get."

The 33-year-old said he hoped he could now put the case behind him.

"I just want to get on with the rest of my life," he said.

Investigating officer Detective Inspector Andy McGregor-Taylor said: "Mr Dyson has been on police bail since September and this has now been cancelled and no further action will be taken against him at this time.

"However, a criminal investigation into what happened to a substantial sum of money is ongoing."

Durham Police confirmed that an internal investigation was also continuing into claims that officers paid only £1 for a buffet that would normally cost £15 a head.

Last night, Mr Khan declined to say why he had settled out of court.

He said: "These allegations are part of an ongoing police investigation. Because it involves senior police officers, I do not wish to jeopardise any inquiry by commenting any further."