Councillors have agreed to settle a four-year rent row with traders in Oxford's Covered Market -- but only if the Government will let them.

Members of the executive board are seeking advice on the possibility of deviating from a High Court ruling which suggested the council should set a 33 per cent increase.

An offer from the traders to pay a 17.65 per cent increase was rejected earlier this year.

Alan Lester, chairman of the Covered Market Traders' Association, has warned that the row will be referred to the Court of Appeal if no deal is struck before May 30.

On Tuesday board members voted unanimously to a deal involving a 20 per cent rent increase if Government officials will allow it. Council leader Cllr Corinna Redman said: "Our property officers are now lobbying the Government Office for the South East on a daily basis to get some sort of ruling on this.

"The clock is ticking towards a May 30 deadline, when the case automatically goes back to court.

"It is frustrating that the two sides are in a position to agree, but we now have to wait to hear from the Government."

Mr Lester urged the council to continue to put pressure on the Government.

He said: "We are prepared to recommend a 20 per cent increase to our members, with no backdated rent. "But if the Government fails to ratify the agreement, we will have no option but to proceed to court with the matter."

If the case goes to the Court of Appeal it will be the third time the issue has been to law.

An original ruling, in the county court, decided on a 10 per cent rent increase but a subsequent hearing in the High Court changed the figure to 33 per cent.

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

If the council wins a 33 per cent increase it will cost the traders about £500,000, including backdated rent.