Darlington FC chairman George Reynolds last night backed down from a legal battle with council chiefs over plans to hold a car boot sale at the club's new stadium.

Mr Reynolds confirmed that he would be applying for planning permission for the car boot sale and market, which was blocked from going ahead after a High Court judge granted an interim injunction.

A full hearing in Leeds today had been due to hear arguments from the club and Darlington Borough Council, but it will now not go ahead.

The council says a section 106 agreement under the Town and Country Planning Act 1990 allows only football related activities on the site of the stadium, while an ancient charter also gives it exclusive rights to hold a market in the town.

Last night, Mr Reynolds repeated his claim that the club could go out of business if it was unable to fetch in income from other events at the Reynolds Arena.

The club recently recorded an operating loss of £1.1m and says it cannot now rely on football income alone.

Mr Reynolds said: "I am going to try and negotiate with the council and do this properly. I could have gone ahead and broke the law but the only ones that would make money out of that would be the lawyers.

"When we built the stadium we intended to rely totally on football but since then things have changed - the television money from ITV Digital has gone which brought in about £200,000 a year.

"A lot of second and third division clubs are facing a hard struggle and are holding car boot sales, concerts and computer fairs."

He added: "If we rely on the agreement we made which said that the stadium can only stage football matches, we won't survive."

A council spokesman said: "We are pleased that the parties involved have agreed that the matter should not proceed through the courts.

"If a planning application were to be lodged, it would go through the due process and we would not seek to pre-empt the outcome."

Parking ban looms - Page 7