Former St. John's mayor Andy Wells came under fire for a fundraising dinner aimed at covering his legal bills. (CBC)

An organizer of a controversial fundraising dinner for former St. John's mayor Andy Wells said Friday the event has been cancelled.

The May 30 dinner had been planned to raise money to cover Wells's legal bills arising from a defamation court case that he lost.

An uproar broke out in Newfoundland and Labrador's legislature Thursday after CBC News reported on the fundraising effort.

Wells resigned as mayor in March to become the full-time chair of the Public Utilities Board.

Kevin Breen, a former St. John's city councillor and an organizer of the event, said the squabble over the dinner has distorted its original purpose.

Opposition Liberals said Thursday Wells should step aside from the PUB while the fundraiser was being investigated.

Premier Danny Williams, though, said Wells had done nothing wrong in seeking help to cover his bills.

Wells incurred legal bills of more than $100,000 arising from a defamation lawsuit he waged against former Coun. Paul Sears, who accused Wells at a 2003 council meeting of not collecting unpaid taxes from companies that had donated to his election campaigns.

Wells won the suit, but the Newfoundland Supreme Court of Appeal dismissed it, and ordered Wells to repay the original settlement and pay Sears's legal bills besides.

Breen said Thursday that no companies or law firms that might appear before the PUB would be approached to buy a $100-a-plate ticket for the dinner, which had been scheduled for a local golf course.

St. John's lawyer Bob Buckingham, who had not been approached for a donation, said Wells was coming very close indeed to being in a conflict of interest.

"If it's a scale between one and 10, you're in a 9.8," said Buckingham.

"These people who are making these decisions have to be seen as being squeaky clean, and not subject to any influence whatsoever."

Williams said Thursday that he had received assurances from Wells and Breen that no ethical lines will be crossed.

He also said he had agreed to ask a government ethics committee to double-check the Wells fundraising dinner, although he said that such a check is likely unnecessary.

On Friday morning, though, Williams told a VOCM open line program "I'm delighted," when he was asked for his response to the decision to cancel the dinner.