IT was business at usual at The Pelican at Froxfield yesterday although the pub has been confiscated by a Jersey court following the island's biggest drugs investigation.

Its owners, David and Carol Lloyd, are awaiting sentencing after being found guilty of money laundering following a police probe into a £3.5 million drug smuggling operation.

The court was told the couple used £370,000 of money laundered from a drugs cartel to buy the pub in 1998.

Under Jersey state laws anything purchased with money obtained from illegal activities can be seized and sold and the money used for the rehabilitation of offenders, including drug addicts.

Jersey's Royal Court, which sits in the island's capital St Helier, decided on Monday to confiscate the ownership of the pub, now said to be worth £950,000, from a Jersey-based company called Taiga Investments Ltd whose directors are David and Carol Lloyd.

Immediately after the hearing the Lloyds' lawyers said they would challenge the court's decision and it was suspended pending an appeal hearing.

The popular pub, on the A4 between Marlborough and Hungerford, was open as usual yesterday.

It is licensed in the names of Gary Jones and Trevor Clark and yesterday Mr Jones, who manages the pub, said: "Nothing will happen to the running of the place. It will continue to run as good as it ever has."

Villagers were surprised to hear that their local, which was once owned by Animal Magic presenter Johnny Morris, had featured in a drugs probe.

Parish council chairman Tony Dezell said there had been talk about the pub being involved in a court case but no one knew any more than that.

Coun Dezell said: "I heard a whisper about this about three weeks ago but I did not know whether to believe it."

He said the Pelican was popular with passing trade. "It's not what you would call a village pub where local people go to sit and have a drink," he added.

Coun Dezell said planning permission had been granted recently for the pub to be extended with the addition of a function room.

Lloyd, 60, and his 52-year-old wife were originally from West Bromwich in the Midlands.

According to sources in Jersey, they returned to the Wiltshire pub after Monday's hearing but yesterday the manager said they were not there and that he was not expecting them.

The long running investigation into drug running between the mainland and Jersey began more than five years ago when a kilogram of heroin was found in a car being driven by Jersey butcher Michael O'Brien at a ferry terminal in Southampton.

A search of his shop in Jersey revealed further drugs including a large quantity of cannabis, 2,500 ecstasy tablets and five kilos of amphetamines.

O'Brien, who was said to have smuggled the drugs onto the island in pallets of meat, was jailed for six years in September 1998 but has been released after serving three. Police estimate that he benefited by £3.5million pounds.

David Lloyd, previously a butcher who lived in Jersey, his wife Carol and Michael Dunne, 56, from Birmingham, were all accused of laundering the money.

Sentencing was due to take place yesterday but the judge adjourned sentencing the Lloyds until September for medical reports after being told that David Lloyd was suffering from a life-threatening liver condition.

The couple face a maximum of 14 years in prison.