The two sides have agreed an out-of-court settlement, halting legal moves that followed Ryanair's refusal to pay �1m in landing fees.

The refusal was a protest at fuel charges, which the airline claimed it was being forced to pay unfairly.

The dispute centred on a levy introduced to recoup �12.5m spent on a fuel hydrant system built in 1991.

In July last year the two sides exchanged writs as the dispute escalated.

Ryanair had claimed the money has already been recovered by BAA but that the fuel levy was still being imposed.

In a statement on Wednesday Ryanair said it had paid BAA the money it had withheld because of the row.

For its part, BAA has withdrawn a claim that Ryanair breached its contract at Stansted.

The settlement means BAA will cut its charge on each litre of fuel from 0.68p to 0.412p - a move that Ryanair believes will save it more than �1m a year.