A local government watchdog has reversed its decision not to investigate Watford Borough Council over the Age UK Hertfordshire saga following intervention by the area’s MP.

The Local Government Ombudsman will now look into a complaint by Age UK that it has been "defamed" by the authority following the acrimonious fallout between the pair over a £500,000 repairs bill.

Originally, Age UK Hertfordshire was told by the watchdog that it would have to pursue its grievance against the council through the courts.

However Watford MP Richard Harrington then wrote to the ombudsman saying he felt it was inappropriate for the charity to go down an expensive legal route and asked the organisation to clarify its position.

Elected mayor of Watford Dorothy Thornhill said she was "totally disappointed" by the decision and that the council would challenge the ombudsman’s decision to investigate the complaint.

However, Mr Harrington said: "I was pleased to receive the letter from the ombudsman in response to my letter to them to discuss avenues through which Age UK can be represented.

"I am satisfied with the response from the ombudsman clarifying that the charity is able to take recourse through the ombudsman as I feel is proper for charities who cannot afford to pursue cases through the courts.

"My overriding aim in this case is to see a swift and satisfactory resolution to this matter and to ensure that Watford charities such as Age UK are given proper representation through the ombudsman."

The watchdog’s U-turn re-opens the bitter dispute between the council and the charity which erupted over the repair bill for two borough-owned buildings, in Exchange Road and The Harebreaks.

In 2010 the charity was presented with a £500,000 repair bill for both the buildings, which it used, after negotiations to move it exclusively into the Harebreaks broke down.

Age UK Hertfordshire refused and the council then threatened the charity with legal action.

The dispute over the bill was resolved last year and the charity is now in the Exchange Road building, yet the rancour between the two parties has continued.

In November, a letter emerged from the council’s managing director Manny Lewis asking the Age UK Hertfordshire board of trustees to consider the position of their chief executive Marion Birch, saying she was damaging the chance of a "harmonious relationship" between the two parties.

Liberal Democrat Mayor Thornhill said the ombudsman’s decision to take up Age UK Hertfordshire’s complaint had disrupted chances of the two parties settling their differences. She also accused the charity's leadership of taking an "antagonistic" stance to the council.

She said: "I am totally disappointed. I had hoped we could get on with building a positive relationship, so it is regrettable. The council is going to challenge whether it is the Ombudsman’s role to decide whether a charity has been defamed.

"To me it is symptomatic of what has been an antagonistic relation from day one."