Oil giant BP has reached an out-of-court settlement with the landowner of the site where T in the Park was held for 18 years.
It is understood the company agreed to the move to avoid a lengthy legal battle with Douglas Alexander as the respective legal teams met at the eleventh hour to thrash out a settlement.
Mr Alexander, 60, had instructed his legal team to sue BP for £8.5 million at the Court of Session in Edinburgh.
He claimed he had previously reached a compensation agreement with BP in the event of the music festival ever having to move due to concerns over a pipeline that runs under part of the land at Balado.
The farmer is understood to have lost millions after it was announced that T in the Park would be moving to rural Strathallan from next year.
This followed concerns which had been raised by the Health and Safety Executive (HSE) for a number of years after it was found that part of the festival site had run over the Forties Pipeline, which carries North Sea oil south to Grangemouth.
The body claimed that if this happened the results would be “catastrophic” and would lead to festival-goers suffering from a “dangerous dose of thermal radiation”.
HSE agreed they would not refer their objections regarding the pipeline to Scottish ministers this year on the proviso that T in the Park moved from the Balado site from next year.
They had said: “HSE has consistently advised Perth and Kinross Council against granting planning permission because in our view the public safety risks it presents mean the site is not suitable for an event of this scale and nature.”
BP were believed to claim there were other reasons besides the pipeline for moving Scotland’s biggest music festival from Balado, Kinross-shire to Strathallan.
They centred on “noise level breaches” although this was denied by a source close to Mr Alexander.
Mr Alexander was unavailable for comment yesterday but a spokeswoman for BP confirmed the matter had been dealt with out of court.
She said: “We have reached a mutually acceptable resolution.”
However, she added she could not reveal the actual amount of the out-of-court settlement.
Gordon Banks, MP for Ochil and South Perthshire, told The Courier he believed the outcome was “just”.
“I’m glad this was settled out-of-court and that the contract that had been set out was delivered on rather than a costly legal challenge,” he said.
The lawsuit had been due to take place over a six-day hearing at the Court of Session, and had been set to begin on Tuesday.