CHELSEA YESTERDAY avoided a lengthy legal wrangle by agreeing compensation with Ray Wilkins less than three weeks after controversially axing him.

Wilkins and the club reached what both described as an “amicable” resolution over the 54-year-old’s abrupt departure from Stamford Bridge last month.

The former Chelsea captain had called in the lawyers after branding the decision to dispense with him as assistant manager an “undoubtedly unfair dismissal”.

Wilkins was told his contract, which was due to expire at the end of the season, would not be renewed and would be terminated with immediate effect.

But he has now reached a settlement with the Premier League champions, who recently insisted they had every intention of honouring the termination provisions included under the terms of his employment.

Wilkins, who joined Luiz Felipe Scolari’s coaching team in 2008 and helped them win the FA Cup in 2009 and their first ever double last season under Carlo Ancelotti, said in a statement on the League Managers Association’s official website “It has obviously been a big wrench leaving such an illustrious club and one which has played such a huge role in my playing and coaching career.

“I have great affection for the club, the staff, the players and its supporters and wish them all the very best for the remainder of this season and the future.

“I would also like to thank the club and the LMA for ensuring that matters have been brought to a swift and harmonious conclusion.”

Chelsea chief executive Ron Gourlay said:”I am pleased to announce that we have come to a swift and amicable agreement with Ray Wilkins and all unresolved matters have been settled.”

Chelsea will also lose sporting director Frank Arnesen at the end of the season, with the Dane having announced his resignation at the weekend. Arnesen stressed the decision was entirely his own.