Misconduct charges against three senior officers at Caerphilly County Borough Council caught up in a pay scandal have been dropped.

Chief executive Anthony O’Sullivan, his deputy Nigel Barnett and head of legal services Daniel Perkins had been arrested on suspicion of fraud and misconduct in public office in 2013, after auditors found pay increases to senior officers were ‘unlawful’. All three were also suspended from the council on full pay.

However a judge at Bristol Crown Court last night dismissed the charges following legal submissions.

Leader of Caerphilly CBC, Cllr Keith Reynolds, said the council would now seek to recover the £1m salary costs lost during the period of their suspension.

He added that there were ‘serious questions to be asked’ of the Crown Prosecution Service (CPS) regarding the length of time taken to resolve the case.

The authority also confirmed all three officers would remain suspended while the council addresses the matter through its own processes.