The Home Office has agreed to hand over £150m to defence company Raytheon over the dispute relating to the cancellation of the £750m e-Borders contract.
The money is on top of legal costs of £35m, which El Reg exclusively revealed has so far been spent in extracting itself from the contract.
In 2007, the Home Office contracted the defence company to design its e-Borders technology system to provide secure border control.
However, by 2010 it had terminated the contract, due to significant delays and missed targets.
A letter from Theresa May to the Home Affairs Select Committee chairman Keith Vaz MP explained: “To protect the best interests of the taxpayer, including from further litigation costs, the government has reached a negotiated resolution with RSL.
"The settlement is a full and final payment of £150m to RSL. This settlement represents a significant reduction on the original award made by the arbitration Tribunal in 2014, which could have cost around £270m with costs and interest (which would have continued to accrue)."
She added: “This settlement recognises no admission of liability on the part of the government. Both parties genuinely held their positions throughout the process. RSL continues to be a valued supplier to the British Government on key defence and commercial pursuits.” ®