THE Wales Audit Office could go to the courts over the legality of a Carmarthenshire Council payment involving pension contributions and a pledge to pay court costs of a libel case against a blogger.
As a stand-off continues between the audit office and council a spokeswoman for the Wales Audit Office said further information relating to the issues could be made public by the appointed auditor.
She said: "He is considering issuing public interest reports to provide the public with detail on the matters of concern.
"This would also give the council an opportunity to respond formally and publicly to his concerns.
"If the council continues to oppose his view he will also have to consider whether to apply to the courts for a declaration that an item of account is unlawful."
Neither steps are definite at this stage according to the audit office.
Wales Audit Office says an indemnity granted to council chief executive Mark James for libel action against blogger Jacqui Thompson was unlawful.
The row, which began after Mrs Thompson was arrested for filming a county council meeting on her phone, saw Mr James win the case leaving Mrs Thompson ordered to pay costs of £23,217.
But council-appointed auditor for the Wales Audit Office, Anthony Barratt, told the authority last month it was wrong to grant indemnity to the chief executive to bring the libel counter-claim which incurred the more than £23,000 of expenditure.
Another matter dubbed unlawful by the Wales Audit Office was remuneration totalling £16,353 paid to Mr James in lieu of employer pension contributions.
Carmarthenshire Council has said it acknowledged the views of the Wales Audit Office and was continuing discussions with them regarding these matters.
The council said it was advised that its payments to Mr James were lawful and they consulted the Wales Audit Office prior to any decision being taken.
Carmarthenshire Council said it had sought independent legal advice on both issues and remained firmly of the view that it had followed the correct course of action.
Chair of Carmarthenshire County Council's Audit Committee, councillor. David Jenkins, has spoken out to urge a quick resolution to the current stalemate over the conflicting views.
"These are just two items in an otherwise excellent report, which gave the council's finances a clean bill of health" said Mr David Jenkins.
"But they are items of considerable public interest and the difference of opinion needs to be resolved as quickly as possible".
On September 27, the committee agreed to approve the accounts noting the difference of opinion.
As things stand, it's a bit of a "Mexican standoff," said councillor Jenkins.
"As both parties involved in the dispute are publicly-funded bodies I hope a resolution can be reached without incurring great legal costs at the expense of the public purse."