New York property developer Abe Hirschfeld gave Paula Jones the cheque in a Washington hotel as partial settlement of the case that began in 1994.

Mr Hirschfeld, 79, who made his fortune from New York car parks and is facing multiple charges of tax fraud, said he was making the gesture for the good of the country, saying he "doesn't give a damn about her case".

"I only care that the market should go up, the people should be working and the economy should be singing," he said.

'Wonderful person'

"I want to thank you again, Mr Hirschfeld," said a smiling Paula Jones in the Mayflower Hotel where the deal was announced.

The money will be Paula's if she does a deal

"You really are a wonderful person."

Ms Jones, 32, alleged Mr Clinton exposed himself to her in a Little Rock hotel in 1991 and asked for oral sex. He was then governor of Arkansas and she was a state employee.

Her case was thrown out by the court in April but her lawyers have appealed. A ruling is not expected for some time.

President Clinton's personal attorney Robert Bennett said he did not know what impact Mr Hirschfield's cheque would have.

"At this point we do not appear to be close to settlement, and I'm going to approach this very cautiously," he said.

Paula Jones, who faces huge legal bills, is demanding $2m to drop it. Mr Clinton's lawers have offered $700,000.