A long-running legal battle between a prominent Sydney rabbi and his cash-strapped congregation has been settled by the London Beth Din.

Rabbi Moshe Gutnick, of the Orthodox Bondi Mizrachi Synagogue, will receive AUS$952,000 (£484,700) when he leaves the congregation, which he has led for more than 21 years.

The LBD ordered the shul to pay the rabbi a £121,224 lump sum when he departs, either by resignation or dismissal. He will then receive the rest of the money in monthly payments, starting in March 2012.

The dispute, which has split the shul’s membership, was heard in Britain after civil action in Australia failed to produce a result. Shul members had been due to vote on a motion to make Rabbi Gutnick’s position redundant, but were stopped when he secured a last-minute injunction from the NSW Supreme Court on the eve of Passover.

The judge ordered that the dispute be settled by a Beth Din.

The Bondi community’s dwindling congregation has left it in a precarious financial position, prompting the move to consider terminating the rabbi’s contract. Shul president Mark Schneider had previously said the community would be forced to sell its Sefer Torahs if the rabbi was kept on.

Rabbi Gutnick is the brother of mining magnate ‘Diamond Joe’ Gutnick.