Covered Market traders in Oxford have warned city councillors they have six weeks to make up their mind about rent increases or face going back to court.

Councillors are currently seeking legal advice on the possibility of deviating from an earlier ruling in the four-year battle which suggested that the council should set a 33 per cent increase.

There have already been two court hearings attempting to resolve the row, which dates back to 1997, and both sides are anxious to avoid a third.

An offer from the traders to pay a 17.65 per cent increase was rejected earlier this year, but they would probably accept a compromise deal involving a 20 per cent increase.

The issue is being discussed in private by the council's executive board tomorrow. Alan Lester, chairman of the Covered Market Traders' Association, said: "We have been told by our solicitors that we have to settle this matter before May 30, or the timetable will be put in place for us to go back to court.

"The tenants are confident that if we do go back to court, the result will be in our favour. However, we do not want to see this drag on because it is ultimately costing the tax payers of Oxford."

Cllr Mike Woodin said he and other board members were waiting for a Government ruling on whether the council could deviate from a previous court ruling.

He said: "No decision has yet been reached and we need to wait to hear the latest advice from property staff." In previous court hearings, one judge suggested that the rent increase should be as low as 10 per cent, but the council appealed and a second judge suggested the increase should be 33 per cent.

If the council wins a 33 per cent increase at the Court of Appeal, it will cost the traders about £500,000, but if the judge reverts to the original 10 per cent ruling, it will cost the council about the same amount.

A 20 per cent increase would leave the traders owing a small amount.

The Covered Market Traders' Association represents 42 businesses. The current rents for the stalls total £591,000 a year