The Scotsman (p3) reports that in a finding to be published soon, Frederick Marks, the commissioner for local administration, has concluded that the council's handling of the housing application was maladminisration.
He has found in favour of Christina Farquhar, who failed to obtain a ground-floor pensioner's cottage despite being top of a particular area's council house waiting list.
It is alleged that David Brown, a councillor, had successfully intervened at a private meeting of the council's house lettings committee to ask that another applicant, the mother of a friend, be given the tenancy.
The council comes in for criticism in the ombudsman's report for failing to follow proper procedures in its handling of the application. Mr Marks will recommend that the council pays£250 to Mrs Farquhar.
Mr Brown, who refused to resign, has denied acting unlawfully or improperly, claiming that he had merely followed the practice of the house lettings committee. The council has since scrapped the committee.