Newham mayor Rokhsana Fiaz hailed a multi-million pound deal with Barclays to end a historic loan dispute as "a great result" for residents.

The council had been in a long-running legal fight with the banking company regarding lender option borrower option (LOBO) loans.

An authority spokesperson said the deal with Barclays allows it to reduce its interest payments "substantially", freeing up funds for frontline public services and avoiding further legal proceedings.

The council said it took out ten LOBO loans with the bank, to the value of £238m, between 2007 and 2008.

Those loans were converted to fixed rate loans in 2017.

In June 2018, the council was one of eight local authorities which issued legal action in a bid to cancel long term loans they took out with the bank.

Newham alleged fraudulent misrepresentation in relation to the loans and the subsequent LIBOR (London Inter-Bank Offered Rate) rigging scandal, first exposed in 2012.

But the eight authorities had their claims thrown out by a High Court judge last year.

The council secured permission to appeal that decision, but the settlement with Barclays brings an end to the legal proceedings.

Ms Fiaz said: “This is a great result for Newham residents and shows that we are an effective and decisive champion for their rights.

"We will always stand up and get the best deal for our residents. This is why the council filed a High Court claim against Barclays Bank in 2018 and was prepared to pursue that case all the way if necessary.

“The deal is a successful resolution of the litigation for the council and means that we can spend and invest very significant sums in services for Newham residents now and in the future.”

A Barclays spokesperson said: “We’re pleased to have reached a settlement with Newham Council on confidential terms.”