Margaret Hodge, the Children's minister, is to pay £10,000 to an ex-offenders' charity, make a public apology in court and pay the legal costs of a child abuse victim she had branded "extremely disturbed".
In an embarrassing climbdown that has almost certainly saved her job, Ms Hodge agreed last night to three demands set by Demetrious Panton, who was abused in an Islington children's home in the 1970s. Michael Foster MP, Ms Hodge's parliamentary private secretary, said that the cash payment would go to the National Association for the Care and Resettlement of Offenders, a charity which aims to cut crime through the rehabilitation of former prisoners. A further payment of at least £10,000 will go to paying the costs of Mr Panton's lawyers. The apology is likely to be made in the High Court but might not occur for several weeks due to a shortage of court time.
Ms Hodge had described Mr Panton as "an extremely disturbed person" in a complaint to the BBC about an investigation into her handling of abuse claims while she was the leader of Islington Council.
Mr Panton, who works as a consultant on regeneration projects run by the Office of the Deputy Prime Minister, had claimed that the description was libellous and malicious.
Mrs Hodge had initially apologised last week in a private letter to him for adding to the "pain and anger" he had endured since the abuse.
But Mr Panton said that the apology appeared motivated by legal and political expediency and warned he would sue for defamation if Mrs Hodge did not make a full public apology, pay his legal costs and make a donation to charity by 4pm yesterday. Ms Hodge had to cancel a reception yesterday while she and her solicitors were locked in negotiations with Mr Panton's legal representatives,hammering out details of the agreement.
Ms Hodge said that the court apology would reiterate the one she made last week. Mr Foster said that the amount of the legal costs to be paid had not been fully agreed but the package was certainly going to be more than £20,000.
Asked whether she would resist the inevitable calls for her resignation, Mr Foster replied: "Her position hasn't changed. She remains committed to the work that she is doing on the Government's agenda for children."
He added: "She will be carrying on with whatever arrangements she can, bearing in mind that government business over the next few days is quite heavy."