THE CRADLE of Liberty Council of the Boy Scouts of America has filed court papers to dissolve the settlement it reached with the city over its Center City headquarters, after the deal languished for more than a year without getting approval from City Council.

The settlement was supposed to conclude a years-long legal battle between the Boy Scouts organization and the city over the group's refusal to renounce the national policy of not allowing gay members.

Citing a city charter provision that forbids discrimination based on sexual orientation, the city in 2006 demanded the Scouts pay $200,000 in yearly rent or face eviction from their building on city-owned land on 22nd and Winter streets.

The Scouts filed suit and won, and the U.S. District Court negotiated a deal in November 2010 that would have had the city sell the building to the Scouts for $500,000, about half the market value. The city also would not have had to pay the Scouts' legal fees, which an earlier court ruling had mandated.

The decision to scrap the settlement on Friday was made during a conference call with the court on Jan. 19, during which both "parties concluded that the settlement to which they had agreed would never be approved by City Council," according to court documents.

Duane Perry, spokesman for the activist group Philadelphians Against Subsidized Discrimination, said yesterday that he had hoped the settlement would not go through because he considered it a sweetheart deal for the Scouts.

He praised Council for blocking its passage by letting the ordinance for approval expire.

"I think [City Council] President [Darrell] Clarke and City Council are the heroes here," Perry said. "I am very pleased with everything City Council has done."

It's unclear what the next step will be. The Scouts didn't return a message requesting comment, and Mark McDonald, spokesman for Mayor Nutter, declined to comment because the matter is still in litigation.