The States debate was held in private for legal reasons

Politicians approved an out-of-court settlement over ownership of part of the island's waterfront in St Helier on Wednesday.

States members spent two days trying to decide whether to give a piece of land worth �10m to Les Pas Holdings to settle a dispute over its claim to ownership of St Helier's foreshore.

Policy and Resources President Senator Frank Walker said the inquiry into the handover will be headed by someone from outside the UK with a proven ability to do such a job.

It is absolutely necessary for the public to know exactly what led us into this situation Senator Frank Walker

Les Pas has been claiming ownership of a large area of the waterfront for several years and had threatened to take the States to court over the issue.

The States voted 26 to 16 to give the land to Les Pas before the case was brought to court.

This week's settlement effectively signals an end to years of court action and further threatened action.

It is understood the States could have faced a legal bill of between �7m and �12m if the case went to court.

But many questions remain. States members and taxpayers want to know how the island's administration was forced into having to transfer land paid for by taxpayers to a private company.

Aware of the huge public interest, Senator Walker said the doors of the inquiry will be open to all.

He said: "It is absolutely necessary for the public to know exactly what led us into this situation in the first place, who's taken those decisions, and why and when and whether those decisions in the light of hindsight and under scrutiny are considered to be good or bad in the best interests of the island."

He said the inquiry will have the power to call witnesses and to make recommendations for change in procedures.

He also said it was likely the man who brought the case against the States, Seigneur of la Fief de la Fosse Richard Falle, will be one of them.