Leicester Mayor Peter Soulsby gives his decision in Thurnby Lodge scout hut row

City mayor Sir Peter Soulsby has resolved a bitter dispute over the future of a disused Scout hut.

Demonstrations – some involving hundreds of people and a heavy police presence – have been taking place in Thurnby Lodge, Leicester, for the past six months over plans by a Muslim charity to turn the hut into a community centre.

But yesterday, Sir Peter announced a plan which appears to have satisfied both sides in the dispute. The protesters, who have formed a group called the Forgotten Estates Committee, will be given the lease on the Scout hut for two and a half years rent-free.

The group has told Leicester City Council it will develop it as a community centre.

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The Muslim charity, the As-Salaam Trust, has been told it can have the lease to another city council-owned building, the Raven Centre, which is next to the Thurnby Lodge Community Centre, where the charity has been meeting for prayers for the past three years.

Sir Peter said a "small number" of groups which use the Raven Centre will transfer to Thurnby Lodge Community Centre, or other local council buildings.

Mohamed Lockhat, As-Salaam Trust's imam, said: "We are happy a solution has been found. Some people have felt very passionately about the Scout hut, but everyone will be able to work together for the good of the community."

Maxine Williams, licensee of the estate's Stirrup Cup pub and a founding member of the Forgotten Estates Committee, said: "Everybody I have spoken to so far about Peter Soulsby's decision has been ecstatic.

"When we first heard that As-Salaam wanted the Scout hut we knew it was the wrong place because of problems with traffic and noise.

"The Raven Centre is in the community centre complex, so car parking is available for As-Salaam's members."

The Forgotten Estates Committee has collected thousands of pounds for its plan to turn the Scout hut into a community centre.

It followed a public consultation in which questionnaires were sent to 7,000 households in Thurnby Lodge and neighbouring Netherhall.

Some 1,400 responses were returned to the council – a turnout of about 20 per cent.

Most backed the plan unveiled by Sir Peter yesterday, which was one of two options on the questionnaire.

"This option meets everyone's needs, and I am therefore offering both groups the opportunity to make this happen," said Sir Peter. "I think both groups recognise we have worked very hard with them to find a solution which meets everyone's hopes and needs. Both recognise there is a need to move forward in a constructive way and I've been encouraged by the responses both have given.''

The protests began in August and were held outside Thurnby Lodge Community Centre when As-Salaam members met for prayers.

A police operation was launched to make sure the protests remained peaceful after complaints that worshippers felt intimidated.

Two months after the protests started, the Mercury reported the cost of policing them had reached £200,000.

The final total is unknown.

On Boxing Day, a pig's head was found outside the centre.

A 23-year-old man has been charged in connection with the incident and is due to appear in court later this month.