Cardiff councillors have been told they can keep £150,000 they wrongly received in allowances, it has emerged.
There will be no court action over the illegal allowances
The 34 current and former authority members will not be asked to return the cash because of the legal cost.
A cross-party committee set up by the council to recover the money has decided not to proceed.
It ends a long-running saga about the £2.7m which the council unlawfully paid out in allowances. Auditors said £152,752 of that was unreasonable.
The councillors who received the allowances argued they acted in good faith and were not told to decline the money at the time.
A potentially expensive High Court battle between the Cardiff authority and the auditor was avoided in December 2004 when the council acknowledged it acted contrary to law.
In April 2006, the district auditor criticised the council, now run by the Liberal Democrats, for linking allowances to officers' salaries under the previous Labour administration.
The Wales Audit Office said the council unlawfully spent £2.7m in allowances between 1996 and 2001.
Auditor Janet Jones said while the council failed to follow procedure, nobody acted dishonestly, but it should look at claiming back the money.
The council then said it made legal errors in spending £150,000 and it was seeking repayment of the money.
The council also unlawfully spent £75,250 in pay for some of its officers, said the auditor's report.
It criticised the council for "falling short of the standards of conduct that the public were entitled to expect".
However, a council spokeswoman confirmed that they were no longer seeking repayment of the money.
"The recovery committee met on 6 July, and having regard to legal advice provided on the merits of any legal proceedings and the likely cost to the public purse, decided not to proceed with any court action," the spokeswoman said.