Architect Hodder Associates and contractor Gleeson have been absolved of liability for the failure of the Clissold Leisure Centre.

The move comes in a commercial settlement agreed between Hackney council and the architect and contractor.

As part of the settlement, Hodder and Gleeson will have to pay a significant, but undisclosed, amount to Hackney to cover repair work. However, they do not have to acknowledge responsibility for the problems that led to the closure of the centre in December 2003.

The agreement is the latest twist in the dispute, which has run for nearly five years. The north-east London leisure centre hit problems after time and cost overruns pushed the budget from £11m to £32m.

Hackney council said mediation with project engineer Whitbybird “had not settled” and the two sides might have to go to arbitration.