In a joint statement released by the council yesterday, mayor Steve Chadwick and council chief executive Geoff Williams said they accepted the decision by Dr Macpherson to withdraw.
In the statement, Dr Macpherson said in light of decisions made by the court on Thursday he had decided to withdraw his petition, meaning the election results as declared will stand.
Mrs Chadwick and Mr Williams said they believed: "This now drew a line on this matter and allowed both the council and community to confidently move forward in the best interests of the district.
"This has been a major distraction and we now want to get on with the important business of council, which has been impacted by this court action," Mrs Chadwick said.
Dr Macpherson said his decision had not been taken lightly and all parties agreed that continuing with the petition was in no one's interest.
In accepting Dr Macpherson's withdrawal, both parties considered mounting court costs, which could now be prevented from rising further, the statement said.
All parties had also agreed to make no further comment concerning the matters raised in the petition, or on the details of the settlement.
Neither the council nor Dr Macpherson would reveal the costs they had incurred when asked by the Rotorua Daily Post.
Dr Macpherson represented himself in court while the council were represented by law firm Tompkins Wake.
Earlier this month, Dr Macpherson lodged a petition for inquiry into the conduct of council chief executive Geoff Williams during the election, claiming he was biased in favour of the incumbent mayor and some councillors, and that had affected the outcome.
In that petition he also questioned the delayed release of a council-commissioned
Community Satisfaction Survey dated June 30, which was released publicly by the council on October 26, after the election.
He wanted the election results declared void and a new election ordered for both the mayoralty and council.
Dr Macpherson stood as a mayoral candidate endorsed by the Rotorua Residents and Ratepayers Association in October's election, losing to Mrs Chadwick by 8990 votes to
6127.
Former district councillor and chairwoman of the association Glenys Searancke and Mike McVicker, who missed out on a council seat by less than 200 votes, said they could understand why Dr Macpherson withdrew his petition.
"I think it was the right move," Mrs Searancke said.
"It could have ended up being a large expense for him and ratepayers."
Mr McVicker said he was not surprised Dr Macpherson withdrew his petition considering the cost to both him and the council.
But he said he was "somewhat disappointed" as he wanted clarity on the reasons for the survey's delayed release.
"I'm annoyed we have not got any finality on the issue," he said.
Local Government New Zealand president Lawrence Yule said he did not think the proceedings had tarnished Rotorua's reputation.
"People can choose to take those steps if and when they wish but councils are very careful following the law when it comes to elections."