As reported by InDaily last month, the LGA referred allegations made against it by the Coober Pedy District Council to the Office of Public Integrity – which is overseen by Lander.

“The LGA has now been provided with permission by Commissioner Lander to publish that he has decided to take no further action on the primary issue identified in our report,”  the LGA said in a statement.

“We will not be making any further comments on this matter at this time.”

A spokesperson for Lander confirmed that the LGA statement was accurate.

Last month, Coober Pedy District Council wrote to the LGA demanding at least $5 million in compensation over the involvement of one of the LGA’s former directors, David Hitchcock, in the outback town’s controversial electricity deal.

When InDaily broke the story in November, LGA chief executive Matt Pinnegar rejected the claim, saying “the allegations against the LGA and David Hitchcock are completely without merit and will be vigorously defended”.

The dispute relates to a $192 million contract for a state and federal government-backed new hybrid-renewable electricity system for Coober Pedy, which was granted to energy company EDL without going to tender.

Coober Pedy District Council has hired high-profile Adelaide lawyer Greg Griffin to take up its fight against the power deal.

In November he sent a letter of claim to the LGA demanding an interim settlement of $5 million. If the claim isn’t agreed to, the council is threatening to take the LGA to the Supreme Court to recover damages for the losses it believes it will incur from the 20-year electricity deal with energy giant EDL.

The LGA has replied to Griffin’s legal letter via its insurers, the LGA Mutual Liability Scheme, but would not reveal the nature of its response today.

Griffin told InDaily today the council would be pursuing its claim despite Lander’s response to the LGA.

“It has had no impact whatsoever on the determination of the council to prosecute the action,” he said.

InDaily has seen a copy of the council’s original letter of demand, in which the argument hinges on the brief tenure of former LGA director Hitchcock as interim chief executive of the Coober Pedy council in 2016.

The letter makes allegations about Hitchcock’s supposed insistence that mayor Michelle Provatidis sign the Power Purchase Agreement (PPA) to enact the 20-year power deal at short notice.

Hitchcock, who no longer works for the LGA but was a director at the time of his secondment to the outback town, has refused to comment on the allegations.