Dai Lloyd Evans was re-elected council leader on Wednesday

There were complaints that he did not declare an interest when the authority discussed its development plan, even though he had land possibly affected.

Mr Evans, an Independent, was re-elected council leader on Wednesday.

The Crown Prosecution Service has not confirmed the news, but Mr Evans said he expected an announcement on Monday.

He heads the new Independent-Liberal Democrat coalition, a group that was formed in the aftermath of the council elections on 10 June.

In May 2002, a BBC Wales investigation revealed that Mr Evans owned two fields near Tregaron which had been earmarked for potential development by the authority.

He bought the land a year before the development plan went out to consultation and said he knew the value of the farmland would rise if it were developed.

But he consistently denied he had done anything wrong and said he could defend his actions.