If it goes ahead, the deal could mark the end of the Jackson scandal as it is unlikely that prosecutors would press ahead with their criminal investigation without the co-operation of their main witness: the child. Although no written agreement can prevent the boy, Jordan Chandler, from testifying against Jackson in a criminal court, prosecutors would almost certainly be unwilling - and legally unable - to force him to give evidence against his wishes.
The possibility that the boy's civil lawsuit might be settled out of court has been rumoured in Los Angeles for days, but yesterday it gained credibility when two media heavyweights - Time magazine and the Los Angeles Times - reported that a deal may be imminent. Estimates of the sum involved start at dollars 5m (pounds 3.3m).
Legal motions in the child's civil case are due to be heard in a Los Angeles courtroom today and will go ahead if the deal has not been completed. It is understood that lawyers on both sides were last night haggling over the fine print.
But if the settlement is announced, it is certain to be accompanied by public statements from the Jackson camp reiterating his innocence, as well as a clause banning the child from discussing the case. Jackson's claim that he was merely a victim of a dollars 20m extortion attempt by the boy's father fizzled out yesterday when the district attorney dropped its investigation into the father's conduct. But many are likely to see such a settlement as an admission of something to hide and it is sure to produce complaints that Jackson has bought his way out of a tawdry problem which the legal system ought properly to have resolved.
It will cause further controversy as police and prosecutors from Los Angeles and Santa Barbara have interviewed dozens of witnesses, and spent hundreds of thousands of taxpayers' dollars, conducting an investigation into the boy's claims. They have not filed any charges.
Recently the singer has stepped up a campaign to persuade the world of his innocence, inviting television crews to film him entertaining deprived children at his exotic ranch, Neverland. He also put in an unexpected appearance at a ceremony organised by the National Association for the Advancement of Colored People. But, however the civil case is resolved, it is extremely improbable that he will recover his career or the huge sums of money he used to generate in product endorsements.