Former Shieldfield nursery workers, Dawn Reed and Christopher Lillie, have settled their High Court libel action against the publishers of the Newcastle Chronicle newspaper.
The settlement came after a week-end of negotiations before the seventh week of the marathon High Court trial.
Although the judge, Mr Justice Eady, has been told of the deal, its terms are being kept confidential until after the final outcome of the trial which has several more weeks to run.
Mr Lillie, 37, and Miss Reed, 31, are continuing their libel action against Newcastle City Council and four members of a review team who, in a 1998 report, concluded that they had physically and emotionally abused children from the nursery.
Four years before the report came out, Mr Lillie and Ms Reed were acquitted of indecently assaulting young children in their care.
The newspaper's publishers, Newcastle Chronicle and Journal Ltd, will play no further part in the libel trial, but both the city council and the review team members are continuing to fight the case.
The hearing continues.
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