Residents of the Copenhagen commune Christiania have handed 51.8 million kroner over to the state as the first instalment to purchase the disused naval base. The organisation charged with managing the settlement, Fonden Fristaden Christiania, is now responsible for an annual payment of just over five million kroner to be phased in over a three year period.

Most of the cash for the payment came via a 30-year loan from Realkredit Danmark after the fund’s own fundraising efforts had yielded just over 8 million kroner.

The agreement brings to close 40 years of wrangling between residents of the self-styled “free state” and the government. Since its occupation by a community of squatter’s the 70s, Christiania has either been viewed as a model of self-government and self-determination or a viper’s pit of illegal drug dealing and lawlessness, depending on one’s point of view.

At Sunday's ceremony marking the transfer, the buildings minister, Martin Lidegaard (Radikale), said he hoped it marked the beginning of a new chapter in the commune's history.

“Today marks the end of the 40 year tug of war between the state and Christiania,” said Lidegaard, adding that he hoped residents will join with the state in combating criminal elements in Christiania.

Recent reports of violence and drug dealing threatened to scupper the deal. A television reporter was attacked while trying to obtain secret footage of the illegal drug sales reports say are resurgent in the free state. Police say the drug sales are worth a billion kroner annually and are being controlled by gangs like the Hell’s Angels.

The deal gives residents control over just over seven hectares of the 32 hectares the commune occupies. In addiition to being granted ownership of most of the current buildings, the commune will also be allowed to construct new buildings. They are also responsible for the maintenance of the buildings located in Christiania that are still owned by the state.