The widow of the tenor Luciano Pavarotti and his three daughters by his first wife are reported to have have settled their dispute over his estate, with the daughters inheriting his villa at Pesaro on the Adriatic coast.

Pavarotti died of pancreatic cancer at his home at Modena last September at the age of 71, leaving more than one will. His daughters by Adua Veroni, his first wife – Lorenza, Cristina and Giuliana – contested a will made six weeks before his death in which he left his American properties and assets, said to be worth €15 million (£12 million), in trust to Nicoletta Mantovani, his second wife and former assistant, and their daughter, Alice.

The family lawyer who helped to mediate in the dispute, Anna Maria Bernini, told the local newspaper Il Resto del Carlino: ''Nicoletta Mantovani and Lorenza, Cristina and Giuliana are today linked by true friendship. And the three sisters fully consider Alice, the maestro's fourth daughter, to be their true sister.''

Ms Bernini said that the decision to give the three older sisters Pavarotti's summer villa at Pesaro was "shared by all and made without any obligations or forms of compensation''. She added that the tenor ''did not want any wars or battles, and the accord his heirs have now reached fully respects the philosophy of this great man''. She did not say whether the three sisters had agreed to forgo rights to the American properties in exchange for the Pesaro villa.

A separate judicial inquiry in Italy into claims that Pavarotti was not of sound mind when he drew up the "American will" is still in progress. Doubts over Pavarotti's mental state were raised by Luciano Buonanno, the local Italian notary who certified the will.

The American assets include an apartment overlooking Central Park in New York and an art collection, including works by Henri Matisse. Estimates of Pavarotti's overall legacy vary from €30 million to €200 million, although he also reportedly left debts of €18 million.

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