GWENT Health Authority and the families of four "vulnerable" residents of the Llanfrechfa Grange Hospital have reached a compromise over their future care.

After a day of High Court negotiations, lawyers for the families said they would "facilitate" a feasibility study into the merits of the hospital's residents moving to a "village community".

And the health authority agreed to place them in such a community if it "reasonably meets their assessed needs", and if it is the "wish of relatives" they be placed there. The families of the residents will also be kept informed of the tendering process leading up to the sale of the Llanfrechfa Grange site, which has been earmarked for development.

All sides agreed they would use their "best endeavours" to ensure a speedy sale of the land.

Outside court yesterday the health authority's chief executive, Bob Hudson, welcomed the settlement.

He said the village community might be incorporated into the existing hospital site if the families could form a "partnership" with potential developers.

But Mr Hudson stressed any such village community was still a second choice. "Our position hasn't changed in that the model we have proposed and we will continue to propose is a dispersed housing model," he said.

"That isn't 'care in the community' as many people perceive it, but sheltered accommodation providing 24-hour support and permanent staffing. These are vulnerable people.

"It would be care provided for NHS patients by the NHS and funded by the NHS." He added the outcome of the settlement allowed the development of Llanfrechfa Grange to move forward, although the bulldozers won't move in for at least 18 months.

Earlier Ian Wise, who was representing four of the 45 residents - Lynne Evans, 40, Michael Shaw, 54, Joan James, 68 and Bernard Maguire, 61 - said a feasibility study was "essential" to resolve the 10-year dispute.

All four suffer from profound learning difficulties, and their families fear that placing them in the community will put them at risk.

Lynne Evans' father John, who helped bring the case to the High Court, told a hearing last year that his wheelchair-bound daughter had an "infantile" outlook on life.