The battle lines were drawn - on one side the pub landlady and her faithful regulars, on the other the neighbours who claimed the noisy tavern was ruining their lives.

They were due to fight their differences in court but before proceedings could begin landlady Mo Devay suddenly announced she was throwing in the towel.

She has been at the Marquess of Exeter, in Upper Hamilton Road, Brighton, for 17 years. The pub has been there for 106 years.

But in recent years some neighbours say they became concerned about loud music, rowdy behaviour and parking problems caused by customers.

Six residents organised a campaign against the renewal of the pub's licence and sent leaflets to other neighbours.

Armed with a catalogue of concerns, they were preparing to outline their case at Brighton Magistrates Court yesterday. Loyal regulars on the opposite side of the public gallery were ready to defend Ms Devay as an excellent community landlord.

Then it was announced in court that Ms Devay was quitting, giving up the licence and the lease on the pub, now owned by Punch Taverns.

Solicitor Andrew Muir told the magistrates: "After 17 years she believes the time has come for her to move on."

A tearful Ms Devay refused to say anything as she left the court, facing the prospect of having to find a new home.

Before the hearing, Ms Devay, who was supported by the Sussex Society of Licensed Victuallers, said: "Whatever happens there will be no winners in this. The past two years have been really traumatic."

Magistrates agreed to renew the licence under various conditions asked for by campaigners, which included Ms Devay relinquishing the licence, after it was confirmed there would be no objection from Sussex Police.

After the hearing the six campaigners, including photographer Paul Winter, 37, and civil servant James Breen, 42, set out the reasons for their campaign in a joint statement.

They said they had decided to pursue their grievances through the courts after talks with the licensee failed.

Their statement went on: "We have each lived in the six houses immediately next to the Marquess of Exeter for between three and 16 years.

"There is a suggestion we are all newcomers who have come in trying to change the tone or the nature of an existing friendly neighbourhood pub.

"That is not the case. We have lived next to the pub for years and have been friends with the licensees. We also tolerated the excesses of the pub for years. It was only in the past six months feelings hardened and a number of us decided enough was enough."

The statement concluded: "Today none of the neighbours are celebrating. We have lost a pub that could have been, and perhaps once was, the heart of the community.

"Our neighbour Mo Devay has lost her livelihood and her home. There is nothing to celebrate here. We have all lost. It's a sad day."

Outside the court, regulars defended Ms Devay.

Company director Jane Twemlow, 49, said: "I cannot understand how people can force someone like Mo out of her job and home. She has been an excellent landlady doing a lot for the community. When the local shop closed she started selling bread and milk.

"These people knew when they moved in they were buying a property opposite and next door to a pub."

Building contractor Mike Way, 49, said: "This area is a village within a city and Mo has been part of the community and served it well."