AM RHODRI Glyn Thomas says revelations that the auditor of Carmarthenshire county council’s accounts has concluded two financial transactions relating to chief executive Mark James to be “unlawful”, are "exceptionally damaging" for the county.

He also believes they "vindicate" long-held concerns he and MP Jonathan Edwards have expressed over the fact taxpayers money was used to fund Mr James's legal costs.

One of the transactions – for the amount of £23,217 – was expenditure incurred in granting an indemnity to Mr James to bring a libel counter-claim against Towy Valley blogger Jacqui Thompson.

The other refers to funds totalling £16,353 paid to the chief executive in lieu of employer pension contributions.

“Carmarthenshire residents will quite rightly be deeply concerned by the findings of the appointed auditor in that he considers two financial transactions by the county council to be unlawful," said Mr Thomas.

“For over three years Jonathan Edwards and I have raised our concern that taxpayers’ money was being used to indemnify the costs of the Chief Executive’s legal action.

“As a result, Carmarthenshire county council’s chief executive has today been the subject of questions to the First Minister of Wales and the UK Secretary of State for Local Government.

“The report’s findings in respect of two unlawful transactions justify the efforts that both Jonathan Edwards and I, as elected representatives, have put into this matter. The conclusion of the auditor in respect of the indemnity vindicates our position over the last three years.

“The report is exceptionally damaging for the reputation of Carmarthenshire and I am firmly of the opinion that officials and elected members of the council’s Executive must be held accountable for their actions.”

A county council spokeswoman said the authority was in discussion with the Wales Audit Office regarding the matters.

"We have sought independent legal advice on both issues and remain firmly of the view that we have followed the correct course of action," she added.

"Regarding the issue of the indemnity to an officer of the council to take action for libel, we would like to make it clear that we consulted the Wales Audit Office prior to the decision being taken in January 2012 and that it has taken almost two years for these concerns to have been expressed.

"We have discussed the matter with them on several occasions and in August of 2012 they indicated, in response to questions from a third party, that they agreed that the council had the legal powers to grant the indemnity.

"It is disappointing that they have now expressed a different view so late in the day, and too late for the council to act upon it.

"Our own independent legal advice still confirms our view that the council was fully entitled to grant the indemnity, and the outcome of the court case and the comments of the judge in that case further reinforce our opinion that we acted properly."