Details of the settlement hammered out by lawyers at a Manchester hotel began to emerge over the weekend. It will leave the two main allegations - the disciplinary action against Miss Halford and her sexual discrimination claim - unresolved.
Although Miss Halford is expected to be given only a token ex- gratia payment of pounds 5,000 by the Home Office in settlement without liability of the equal opportunities tribunal, she will receive a generous financial package if her early retirement from Merseyside police is agreed tomorrow.
Merseyside Police Authority, which adjourned on Friday, is under pressure from the Home Office to settle its own terms with Miss Halford, suspended from her post as assistant chief constable.
Its members are said to be 'deeply unhappy' that Miss Halford is asking for pounds 10,000 'out of pocket expenses' in addition to her standard entitlement of a pension of around pounds 33,000 - index- linked for the next three years - and a lump sum of pounds 125,000, based on her 32-year career.
The authority is also uneasy at Miss Halford's departure under the medical retirement procedure, which she has attacked. Its approval is needed for her application for early retirement because of an arthritic knee. This has enhanced her pension and prevents her facing a disciplinary tribunal over claims that she engaged in drunken frolics in a businessman's swimming pool while on duty.
George Bundred, the authority chairman, who has been accused by Miss Halford of assisting the blocking of her career, said yesterday: 'It's not normal to give money to officers who retire while facing disciplinary action.
'The question of her arthritic knee is also worrying members because it is insufficient grounds for not appearing at a disciplinary tribunal; we can give her a chair.'
The Home Office is concerned about the cost of at least pounds 1m so far and the damage to the police's image, while the Equal Opportunities Commission has spent at least half its pounds 600,000 annual legal budget on the case.