John Korner, a retired farmer and opponent of a Scottish parliament, has won an interim interdict (injunction) preventing the council taking any action in support of devolution. The council this week decided against an appeal to the Court of Sessions after the sherrif principal upheld the interdict.
Dumfries and Galloway agreed in July to set up a cross-party working group to campaign for a yes vote in the referendum on 11 September.
Brendan Kearney, practice manager legal services, said he had repeatedly told both Mr Korner and the courts that no money would be spent on the campaign and that the council would not be contravening the Local Government Act 1982.
'Over and above this, councils do have an important and legitimate role to play in encouraging a high electoral turnout at the referendum,' he said.
'It is important that public opinion in Scotland is fully tested.'
Dumfries and Galloway was particularly concerned at the sherrif's views on the role of local government in political matters, Mr Kearney said.