A lawsuit over the idea of building a bridge across Knik Arm had one branch of the state fighting another branch, with a couple of local governments thrown in. It had the potential to waste piles of public money.

So it's good, from a money-saving standpoint, that the parties reached a settlement this week to end the lawsuit.

But the project itself is still ill-conceived in its current configuration as well as dauntingly expensive. It also has the potential to become a poster child of government waste. It should still be delayed or dropped altogether.

The bridge would send commuter cars and trucks across Government Hill, running roughshod through one of Anchorage's oldest neighborhoods, and it would dump bridge traffic onto downtown streets right in an area that the city has been trying to make more pedestrian friendly.

It would also promote sprawling residential areas on the Valley side, contrary to Anchorage's long-range development plan.

The latest estimates are that the bridge would cost at least $680 million, and the Knik Arm Bridge and Toll Authority, a state agency, is still trying to figure out how to finance it.

As Alaska struggles its way out of recession, it's not a good idea to commit to such a wildly expensive project. If the crossing does stay on the list of transportation options, a recent proposal to add a railroad link, plus pedestrian and bicycle facilities to the bridge, needs to be thoroughly examined.

The AMATS Policy Committee, a group of state and Anchorage officials that makes decisions on local transportation spending, voted unanimously in June to push the bridge back until at least 2018. That would have slowed spending on the project. It was a wise choice.

Then the lawsuit filed by the Valley cities of Houston and Wasilla changed the game, and put a judge in charge of decision-making. The cities contended in the lawsuit that they hadn't had a chance to comment on AMATS decision to delay the Knik Crossing.

The settlement this week calls on AMATS to rescind its June vote. But AMATS can do a re-vote, and once again shift the project to the out years, removing it from Anchorage's short-term project list. Under the settlement, the only issue is that AMATS must allow 30 days for public comment before a final decision.

That's what it should do. The project didn't make sense for Anchorage in June and it doesn't make sense now. And it's Anchorage residents, not Houston or Wasilla, that will bear the brunt of the mistake.