First National Building Society said last night it had resolved a legal conflict with a former employee, avoiding a High Court examination of the case. It is understood that that the employee took action to defend his reputation in relation to the recent probe into `kiting' of cheques at a North Dublin branch. It is believed that he was not a member of the building society's staff for the period being investigated.

A spokesman for First National would not elaborate on the statement that a settlement had been reached. He added that the investigation, which is still ongoing, showed a breach of procedures but no evidence of loss to the building society. `Kiting' involves rushing cheques through an account before they have officially cleared, boosting cash-flow. Banking specialists say the way to guard against the practice is to disallow withdrawals on uncleared funds.