Former child protection boss Sharon Shoesmith is set to receive a six-figure payout for being unfairly dismissed following the Baby P tragedy.
A Haringey Council spokeswoman confirmed that a settlement had been reached but the terms of the agreement were confidential, although reports suggest it is a six-figure sum.
There has been widespread condemnation at the reported payout with former Children's Secretary Ed Balls -the man who removed her from the role - saying the payout left "a bad taste."
Ms Shoesmith was fired from her £133,000-a-year job by Haringey Council without compensation in December 2008, after a report from regulator Ofsted exposed that her department failed to protect 17-month-old Peter Connolly - then known publicly as Baby P.
Baby Peter died in Tottenham, north London, in August 2007 at the hands of his mother, Tracey Connelly, Steven Barker, and Jason Owen.
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.
Ms Shoesmith's lawyers argued that she was the victim of ''a flagrant breach of natural justice'' fuelled by a media witch-hunt.
Communities Secretary Eric Pickles accused Haringey Council, which reached the confidential agreement with its former director of children's services, of "bankrolling a state-sponsored cover-up".
Ed Balls said the payout left a "bad taste in the mouth" and insisted he would make the same decision to sack Ms Shoesmith.
Balls, who is now the shadow chancellor, said: "I made the decision to remove the person who had failed, I did so in the best interests of children across the country. Faced with the same situation I would do the same thing again."