The defamation case taken by businessman Pádraig Ó Céidigh against Galway city councillor Padraig Conneely has been settled out of court.

Mr Ó Céidigh had sued Fine Gael councillor, Padraig Conneely over comments he made about him at a meeting held in the chambers of Galway City Council in 2010.

Mr Conneely's solicitor, Brian Leahy, informed Judge Rory McCabe at Galway Civil Court today that the matter had been "straightened out".

Mr Leahy said that the case was now settled between the parties subject to a statement of clarification from his client being read out in court.

He said the terms of the agreement reached were to remain confidential to the parties.

In the statement, Mr Conneely said he never intended to cast any aspersion on Mr Ó Céidigh good character and that he regretted any misunderstanding that may have occurred.