Former child protection boss Sharon Shoesmith could receive a six figure payout for her unfair dismissal following the Baby P tragedy, according to reports.
Peter Connelly, known publicly as Baby P, died when he was 17 months old after suffering months of abuse at the hands of three people who have since been jailed, including his mother.
Ms Shoesmith. the former head of Haringey's children services, won a ruling in 2011 that conceded she had been unfairly dismissed following the publication of a report on the toddlers death.
A settlement which could reach up to £600,000 has been agreed, though Ms Shoesmith may receive a lower sum, according to BBC 2's Newsnight.
Some of the cash will come from central Government coffers but it is expected that Haringey council will foot most of the bill.
A Haringey Council spokeswoman said today: “Following the decision of the Court of Appeal in favour of Ms Shoesmith, and the court's direction that the parties seek to resolve the issue of compensation, the London Borough of Haringey and Ms Shoesmith have reached a settlement in this case.
“The terms of the settlement are confidential. We are unable to comment further on this matter.”
Shadow Chancellor Ed Balls removed Ms Shoesmith from her £133,000-a-year post as Haringey Council's director of children's services while in his post as Children's Secretary, after a damning report on the death of Baby Peter.
She was then fired by the north London council without compensation in December 2008, after the publication of a report from regulator Ofsted exposed how her department failed to protect Peter. She has not worked since, according to reports.
But her lawyers argued that she was the victim of “a flagrant breach of natural justice” fuelled by a media witch-hunt.
In May 2011, the Appeal Court concluded she was unfairly sacked because Mr Balls and Haringey did not give her a proper chance to present her case before being removed from her post.
The Department for Education and Haringey sought permission to attempt to overturn the ruling in the Supreme Court but judges rejected the applications, paving the way for her to claim compensation, which some experts predicted could be in the region of £1 million.
Peter died in Tottenham, north London, on 3 August 2007 at the hands of his mother Tracey Connelly, her lover Steven Barker and their lodger Jason Owen, who were jailed in May 2009 for causing or allowing his death.
He had suffered more than 50 injuries despite being on the at-risk register and receiving 60 visits from social workers, police and health professionals over the final eight months of his life.
Mr Balls said at the time at the time of the Appeal Court ruling that he was “surprised and concerned” by the decision, which he warned would make it “difficult for ministers to act swiftly” when children are at risk.
The Ofsted report into Peter's death catalogued “catastrophic management failures” on such a devastating scale that Haringey's council leader and lead member for children's services resigned their posts, he added.
“I judged on the basis of that independent report - and on the advice of departmental officials and lawyers - that the right and responsible course of action was for me to use my statutory powers to remove the Director of Children's Services from her position with immediate effect.”
Conservative MP Charlotte Leslie, a member of the Commons education select committee, told Newsnight Ms Shoesmith should “demonstrate personal responsibility”.
She said: “A blame culture is not the same as a culture in which people take responsibility and accountability.”
Tory former children's minister Tim Loughton told the BBC Radio 4 Today programme that "we are effectively rewarding failure.
"When you are appointed a director of children's services - this is the whole point of the reforms after Victoria Climbie, which again happened in Haringey - is that the buck has to stop somewhere and someone has to take responsibility.
"You don't expect that person accepting responsibility, reluctantly in this case, to get a very large cheque on the back of it as well."
Additional reporting by Press Association