Legal challenges to the construction of sections of the Corrib gas pipeline have been settled at the Commercial Court.

The challenges were brought by local residents Peter Sweetman and Monica Muller and An Taisce against An Bord Pleanála's decision in January to grant permission to Shell E&P Ireland for its third proposed route for the pipeline.

They claimed the proposed pipeline crossed several areas of special interest in Co Mayo that were protected by the EU Habitats Directive.

They were also challenging consents for the construction of the sections issued by the former Minister for Energy, Pat Carey, and current Minister for the Environment Phil Hogan.

And An Taisce was challenging a foreshore licence issued by Mr Hogan this year.

All the proceedings have been struck out. As part of the settlement, a statement was read out on behalf of the State.

In the statement, the State acknowledged that An Taisce acted properly in bringing the proceedings.

It said, in view of the concerns of An Taisce and their interest in the full transposition and effective implementation of European environmental law, the State has agreed to establish an Environmental Law Implementation group through which there will be formal engagement by the State with An Taisce.

The State has also agreed to make a contribution to An Taisce's legal costs.

The State also acknowledged that Ireland had failed to transpose properly certain aspects of the Environmental Impact Assessment Directive. It was now intended all of the necessary transposition measures would be taken by the end of 2011.

However, the State maintained that the consents which were the subject of the proceedings were valid and had been granted only after all necessary environmental assessment under Irish and EU law.

In a statement, An Taisce said it maintained its position that the manner in which the Corrib Gas Development Project had been consented to and constructed was a travesty of European environmental law.

It said the State had proposed a settlement to An Taisce. It said at the heart of the settlement was a commitment from the Government to complete outstanding legislative transposition and to engage directly with An Taisce to address compliance with European environmental law.

It said the critical objective for An Taisce was to ensure what happened in the Corrib project could never happen again.

An Taisce said had the cases continued, it believed further litigation to the Supreme Court would have followed and possibly further planning applications. It said the State had settled the case rather than continue to defend it.

It said this was a singular concrete acknowledgement of the group's grievances in respect of the Corrib project, no matter how much the State continued to assert the validity of the consents or justify what they did today.

In a statement read in court, Shell E&P Ireland Limited said it was and always had been its intention to comply in full with all of the conditions applicable to the permissions and consents granted to it, including all environmental management plans.