THE controversial Wattersgate sleaze row, which flared in January and has split West Dunbartonshire Council, took another dramatic twist last night.

The Labour administration decided not to contest a Court of Session action by replacing two councillors due to sit on a special committee to hear a grievance raised by chief executive Michael Watters.

The council will now go back to the Court of Session in an attempt to have an interim interdict which halted the proceedings removed.

Mr Watters successfully raised the action after claiming that housing convener Jim Flynn and social work chairman Duncan Mills were biased against him.

Depute leader Tony Devine said last night that the council regretted the fact that Mr Watters felt it necessary to take court action against the authority.

''The administration have given very careful consideration to defending the court action,'' he said.

''The accusations made in the petition against individual Labour councillors are vehemently denied, and the administration is confident that the outcome of the court case would have gone in the council's favour.

''Notwithstanding this, the administration is aware that any court proceedings are likely to be time consuming and cause further delay to our objectives of ensuring we have an efficient and effective council.''

The three-man grievance committee was due to hear bullying complaints by Mr Watters, but was halted when the ban was imposed by Lord Cameron.

The grievance committee will be reconstituted with Councillors Patricia Rice and Geoff Calvert taking over.

Mr Watters is claiming that council leader Andy White and Labour group secretary Jim McCallum connived to get rid of him and depute Ian Leitch.

The Labour move sparked furious reaction from SNP group leader Bill Mackechnie, who claimed the issue had been a total sham from the start.

''At one stage the Labour administration is going to be exposed to ridicule in the eyes of the public,'' he said. ''This whole matter could have been sorted out weeks ago by an independent investigation.''