Lawless was arrested last December on allegations of fraud and corruption and his home searched by Merseyside Police.

The police have agreed to settle the claim and will pay Lawless’s costs.

Lawless has strenuously denied the allegations against him which have led to funding problems at his company Elliot Group.

Last month Elliot Group was forced to put three stalled residential tower schemes into administration.

Commenting on the latest development Lawless said: “I am very pleased that the police quickly agreed to settle these proceedings. I have consistently denied any wrongdoing and the allegations made are baseless.

“Today’s agreed order is another major step towards bringing the investigation to a conclusion.

“Hundreds of local workers lost their jobs as a result of the arrest and tens of millions of pounds of investors’ funds are now at risk.

“Prior to my arrest I was in advanced discussions with a number of leading national and international funds, which have since pulled out.

“I shall continue to work with the administrators to see how we can secure best value for our investors.

“I am now going to get back to work, bringing jobs and investment to Liverpool and the wider north west. I have a number of schemes in the pipeline and have instructed my architects and planning consultants to go full speed on these.

“I am keen to begin working with Liverpool council again to develop schemes that will add value to the city and take it forward economically and physically.”

Quashing of the search warrants follows a recent court ruling refusing the police application to extend bail which released Lawless from any bail restrictions.

Lawless added: “As part of the settlement of my judicial review, I have agreed voluntarily to provide relevant documents and electronic records to the police so that they can complete their investigation without further delay.

“Nobody has delivered more new homes in Liverpool than Elliot Group in the last seven years.

“We have built more than two and a half thousand homes across 21 sites, with new hotels, restaurants, bars and other commercial space also brought to market and we have a 100 per cent track record of delivery.

“Up until the arrest on 18th December there were hundreds of skilled local trades at work on our sites delivering thousands more homes for the city of Liverpool.”