Former Rangers chief executive Martin Bain has dropped his legal action against the club, lawyers said today.
Mr Bain was pursuing the Glasgow club for almost £900,000 in damages, alleging a breach of contract following its takeover by businessman Craig Whyte.
The case at Scotland's highest civil court, the Court of Session in Edinburgh, was due to be heard in full in August.
Last year a judge told the club, which entered administration in February, to set aside almost £500,000 in the event that Mr Bain won his case.
Today Mr Bain issued a statement via legal firm Levy & McRae in which he stated that he would discontinue the legal action.
He also said he will return the money frozen as part of his case, minus legal expenses, to the administrators "in an effort to help the club".
He further criticised the "shocking" damage he said has been "inflicted" on the club.
Mr Bain's role at Rangers ended after Craig Whyte's takeover in May last year.
The stricken Ibrox club went into administration on February 14 after the taxman lodged a petition over the non-payment of around £9 million in PAYE and VAT following the takeover.
Mr Bain today insisted that he would do everything he could to help the club "in these difficult times".
He said: "Everyone close to Rangers Football Club knows that I am and always have been totally committed to the club, and that remains my position.
"As chief executive and part of the independent board, our job was to assess and highlight to all stakeholders if we believed there was uncertainty over the future financial viability of the club under new ownership.
"Unfortunately, the independent board had no legal power to block the transaction and (former owner) Sir David Murray made it plain that he wanted to sell."
Mr Bain stressed that his legal action was a response to Mr Whyte's actions and not those of the Old Firm club.
His statement went on: "I personally strongly recommended on more than one occasion that Craig Whyte should not be allowed to buy the club, based on investigations into the transparency of his background and the responses to the questions asked of him as part of the process.
"Unfortunately that forceful representation was not accepted and when he took over I was suspended and my contract ripped up. With what has subsequently transpired, it is quite obvious why he disposed of me in the manner he did. I was further vilified in the press and continue to be subjected to endless rumours and attacks.
"Events have moved on and the damage inflicted on Rangers Football Club is shocking. I had no option but to pursue a claim based on Craig Whyte's actions; the litigation was a response to his actions and not those of Rangers Football Club.
"I firmly believed it was important to make sure he would have to explain everything he did in a court of law.
"Because of the legal process it has not been possible or appropriate to make public comment, which has been extremely hard given the flow of misinformation and falsehoods both myself and the club had been subjected to."
The former chief executive also said that turnover at the club had increased and the debts were reduced in the time before Mr Whyte "forced" his exit.
He went on: "In the two years since the board restructure in August 2009 and prior to Craig Whyte forcing my removal from the club, turnover had increased, operating costs reduced with net debt more than halved from £31.1 million at June 30, 2009 to £14.1 million at June 30, 2011, while the club had won three consecutive league titles in difficult circumstances. This debt reduction was beyond the targets set by the bank.
"In light of the club's current position, I instructed my lawyers to advise the administrators that I am willing to discontinue the legal action and, subject to recovering the costs associated as a result of this action, I will give over to the administrators the remainder of the money that was arrested as part of my case in an effort to help the club.
"I always have done, and will continue to do, everything I can to help the club in these difficult times."