The housebuilder bought the land at Carnie in 2004 for £350,000 plus an agreement to share any future profits.

Stewart Milne resold the 11 hecatres of land for nearly £500,000 to a subsidiary in 2006 but the council claimed it was hugely undervalued.

The dispute has been rolling through the courts for years but now both sides have reached an agreement.

Director of Enterprise, Planning and Infrastructure Gordon McIntosh said: “It makes sense for the council to accept an offer which we feel is fair and reasonable from the Stewart Milne Group, rather than continue with protracted court proceedings and associated risks.”

John Irvine, Group Finance Director, Stewart Milne Group said: “We are pleased that the matter has been resolved and look forward to continuing a positive working relationship with the council in the future.”