Small firms lobby group ISME yesterday voted in a new constitution aimed at trying to heal the split which has riven the organisation for the past year. Amid a sometimes farcical and often rancorous meeting, 80 per cent of the 50 members present voted for the new proposals.

As part of the new constitution, the national council - comprising around 30 members - will elect seven members to the ISME board, which oversees the running of the organisation. A further three directors will be drawn from the existing seven founder shareholders and trustees, who include Mr Eoghan Hynes and Mr Terry Hobdell.

Attempts to raise other business, including the position of Mr Frank Mulcahy, the organisation's communications director who was sacked last month by the board, was ruled out of order by the chairman, Mr Seamus Butler. It has been agreed to raise this, and other matters, at the group's annual general meeting in July.

The meeting descended into farce early on when it emerged that some members had received a different agenda for it. It had purported to come from ISME's head office and there were heated exchanges on the issues for some 20 minutes. It was then agreed to take the agenda which the majority of members had received - to discuss the proposed constitution, but not any other business.

The existing board, which also includes Mr David Dixon and Ms Irene Bergin, has been in direct conflict with Mr Mulcahy amid allegations over irregularities during his tenure. Mr Mulcahy has rejected the allegations.

The row has split the organisation, held it up to ridicule and resulted in a number of threats of legal actions between members. It is also understood that membership numbers have suffered.

Mr Mulcahy circulated a five-page briefing note to the members yesterday - he attended the meeting but did not contribute - outlining the allegations against him and putting his own position. He also said that, last Friday, he had initiated an unfair dismissal and reinstatement case against Mr Butler.

"My solicitors are actively pursuing libel and defamation litigation against individual members of the board as of June 30th, 1998, in their personal capacities," his statement said.

Mr Robert Berney, a recently appointed director, told members that they had two choices - either to draft a new constitution or amend the existing one. He and others who worked on the constitution said they had chosen the latter course.

He said the national council - which is elected by the members - would decide policy and the board through ISME Ltd would implement it. He said there was also provision for the seven trustees to be replaced over a three-year period. He acknowledged that the trustees could decide who replaced them, but said this was for continuity purposes.

Some members were angry at the continued involvement of the trustees, blaming them for much of the conflict which had arisen. Some members also asked why the national council could not elect 14 members themselves.

Mr Berney said the new constitution was "legally waterproof" but conceded that it may need some amendments in the future. Mr Oliver Cleary said he was in favour of the new constitution because the old one had been used as a "stick to beat us with" by existing board members since they had re-appointed themselves last January.

Mr Cleary was one of seven new directors elected by the national council earlier this year, but who were told by the existing directors that their request was not being acceded to, because the directors claimed the constitution did not allow it. The same day the board sacked Mr Don Curry, another founder member and director, but refused to specify why.

Mr Sean Hannick said that members "had got very little service for the past year" because of the infighting in the organisation. He said the directors had squandered almost £250,000 of members' fees on solicitors and auditors because of the allegations (against Mr Mulcahy).

One director retorted: "Whose fault was that?"

Mr Hannick accused the directors of muzzling the members since they had re-appointed themselves last January. The directors, with the exception of Mr Curry, had resigned before Christmas but later re-elected one another.