The NT Environment Protection Authority has agreed to quarantine charges against the council for its illegal tyre dump near the showgrounds after council secretly agreed to finance major environmental works as part of a deal which will lock future councils in for a decade.

They include:

The deal has already been signed in private meetings, although the agreement itself has been made public today and locks in Katherine for 10 years.

In return the EPA has agreed not to prosecute the council and "KTC's past and current elected members" for general environment offences.

But it reserves the right to activate the prosecution again if the agreement's terms are not met.

The surprise outcome of the long investigation comes as Mayor Fay Miller announced late Monday she would be standing down from November 30 for health reasons.

EPA chairman Dr Paul Vogel said his board considered "long and hard" about whether to prosecute the council.

"That would have taken years before the courts, cost a lot of money on both sides and ultimately the ratepayers would have to pay," Dr Vogel told Katherine Times this week.

"This is a much better environmental outcome for Katherine, and we don't think they have got off cheaply at all."

An illegal stack of about 300 tonnes of tyres, stored behind the showgrounds, caught alight on Territory Day last year, sending a pall of toxic smoke across Katherine South for days.

The fire was eventually smothered in soil, but continued to burn underground until mid December, worsening the contamination and making the clean-up bill even more expensive.

The bill to ratepayers, already believed to be more than $500,000.

There are no costings on what the final bill will be now this agreement has been signed.

Faced with a long list of breaches to environmental law, based around their duty of care to the town's residents, the council has already signed up to a "performance agreement" with the EPA.

The EPA said its long investigation confirmed the council was not licensed to store or dispose of waste tyres at the site and had potentially committed a number of offences under the Waste Management and Pollution Control Act 1998.

Those offences exposed the council, the aldermen, and its ratepayers, to fines potentially costing millions of dollars.

Council has now entered into a performance agreement with the NT EPA under section 66 of the Waste Management and Pollution Control Act 1998 as the preferred compliance and enforcement action in relation to this matter.

The performance agreement requires council to:

Dr Vogel said the performance agreement rather than pursuing a prosecution would provide long term benefits for Katherine's residents.

"Council engaged with us openly and immediately about this matter," Dr Vogel said.

"Council has already spent considerable sums of money and will need to spend more to continue the clean-up from the waste tyre fire.

"Pursuing a prosecution through the courts would have diverted resources away from the Katherine area where they are needed and potentially unfairly penalise ratepayers through considerable fines and legal fees.

"A prosecution would not have achieved what this agreement does which is a very positive and long term outcome for the Katherine community.

"Council's commitments under the agreement will put Katherine at the forefront in waste planning and management in the NT.

"The tyre fire incident and NT EPA's response reinforces the need for all councils to ensure that waste is effectively managed.

"The air quality monitoring station will for the first time provide Katherine residents with real time data about the quality of the Katherine air environment during the fire season, as well as an increased understanding of any potential impacts to Katherine residents.

"This outcome commits Katherine Town Council to making significant and ongoing improvements to its environmental performance as well as delivering environmental and health benefits for the community."

As soon as it became clear where the pall of acrid, black smoke which blanketed Katherine South was coming from on July 1 last year, the EPA was called in to investigate.

Just why the unlicensed dump was there has never been properly explained.

Council has said it created the second tyre dump because it considered the fire risks were greater at the rubbish tip, where a further 450 tonnes of tyres had been left.

Dr Vogel said the issue of correct disposal of old tyres was an issue right across the Territory.

A pall of potentially toxic smoke drifted across Katherine South for days from the acrid fire as the free celebration events at the showgrounds were hurriedly moved.

Coming next:

The full terms of the deal made public for the first time.

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