STRAUSS-KAHN WILL PART WITH USD6M TO SETTLE LAWSUIT

Former IMF head Dominique Strauss-Kahn has reached a preliminary agreement to settle a civil lawsuit brought against him by a hotel maid who accused him of sexual assault last year, sources familiar with the case said.

Former IMF head Dominique Strauss-Kahn arrives at a polling station in the second round of the 2012 French presidential elections in Sarcelles May 6, 2012. REUTERS/Gonzalo Fuentes

U.S. and France-based lawyers for Strauss-Kahn, who was once tipped to become French president, on Friday acknowledged a deal was under discussion, but said it had not yet been finalised.

They also denied as "flatly false" and "fanciful" a report that he agreed on a $6 million (3.7 million pounds) settlement.

"The parties have discussed a resolution but there has been no settlement. Mr. Strauss-Kahn will continue to defend the charges if no resolution can be reached," Strauss-Kahn's U.S. lawyers, William Taylor and Amit Mehta, said in a statement.

"Media reports that Dominique Strauss-Kahn has agreed to pay six million dollars to settle the civil case are flatly false."

French daily Le Monde, citing people close to Strauss-Kahn, said he and the maid Nafissatou Diallo would meet a judge in New York on December 7 to sign a $6 million settlement and close an affair that ended the Frenchman's International Monetary Fund career and wrecked his presidential ambitions.

"The discussions have been going on for weeks, months. The agreement should be confirmed at the start of next week," Michele Saban, a friend of Strauss-Kahn who saw him recently, told Reuters in Paris. She could not confirm the sum involved.

"We are moving towards the end of a tragedy," she said, adding that Diallo had always been open to negotiating a settlement despite reticence from her lawyers.

Le Monde said 63-year-old Strauss-Kahn planned to take out a bank loan for $3 million and would be lent the other $3 million by his wife Anne Sinclair, despite the fact the couple separated in the summer and now live on different sides of Paris.

Strauss-Kahn's Paris-based legal team declined to comment on whether a deal had been reached with Diallo, but denied Le Monde's report of the sum involved.

"Neither Dominique Strauss-Kahn nor his lawyers will comment on proceedings in the United States. That said, however, they strenuously deny the erroneous and fanciful information relayed by Le Monde," said a statement from the Paris lawyers.

The New York Times, which first reported the development, also said the pair would appear before a judge in New York next week. It said the settlement sum could not be determined.

END OF THE AFFAIR

News of the U.S. deal comes as Strauss-Kahn is awaiting a decision by a French court on December 19 on whether to call off a sex offence inquiry involving parties in Lille attended by prostitutes, where he risks trial on a charge of "aggravated pimping".

If that case is dropped and Diallo ends her civil case, Strauss-Kahn would have a freer rein to pursue his consultancy work and could even consider a tentative return to public life in France, where he has been shunned since the Diallo scandal.

Images of the then IMF chief paraded before TV cameras in handcuffs before being charged with attempted rape shocked the world and led to French media raking over smutty details of the former finance minister's private life.

"That's the end, not only of this affair, but of any potential affair because one of the reasons for signing this kind of agreement is that both parties agree that they will never again bring a lawsuit," Christopher Mesnooh, a U.S. lawyer who practices in France, said of the Diallo agreement.

"There will always be people who wonder about what happened in New York and in Lille, but from a legal standpoint if he gets all this behind him, he's a free man," he added.

Diallo alleged that Strauss-Kahn forced her to perform oral sex on May 14, 2011, in his suite at the Manhattan Sofitel.

The criminal prosecution fell apart after doubts emerged concerning Diallo's credibility as a witness and the attempted rape charges against Strauss-Kahn were eventually dropped.

Strauss-Kahn, who in May 2011 was days from entering this year's French presidential election, has maintained that the sexual encounter was consensual, although he said in a TV interview after his return to France that he regretted his "moral error".

He filed his own countersuit against the maid earlier this year, claiming that Diallo's accusations had destroyed his career and harmed his reputation.

In recent months, Strauss-Kahn has been making a comeback under-the-radar with a handful of speaking engagements at private conferences and by setting up a business consultancy firm in Paris.