David Pyke, one of Mrs Jones's Dallas-based lawyers, said his firm's representation would last only through the appeal of her dismissed lawsuit.

President Bill Clinton: Tougher approach after election success

Mrs Jones filed a sexual-harassment lawsuit in 1994 claiming that in 1991 Mr Clinton, then governor of Arkansas, exposed himself to her in a Little Rock hotel room, and asked for oral sex.

Mrs Jones claimed that by refusing Mr Clinton her career as a state employee suffered.

Her case was dismissed by an Arkansas judge in April, but investigations in relation to it had already unveiled details of what would become the Monica Lewinsky scandal.

Mrs Jones's lawyers appealed against the Arkansas decision, and a ruling is expected in December.

But even if it is in favour of Mrs Jones, her lawyers are not going to see the case through. They are said to have been frustrated by their client's reluctance to settle the case outside court.

Abe Hirschfeld and his $1m cheque - payment is subject to settlement

Mrs Jones has accepted a $1m offer from the eccentric tycoon, Abe Hirschfeld to help settle the matter.

But she has refused a $700,000 deal negotiated between her lawyers and the President's attorney, Robert Bennet.

She had been asking for $1m, but on Thursday she reduced the demand to $950,000.

According to the Washington Post, President Clinton, in the light of his party's good showing in mid-term elections earlier this week, has now withdrawn the $700,000 settlement offer.

Insiders said that Mr Bennett telephoned Mrs Jones's Chief Counsel, Donovan Campbell, to tell him that the offer was off the table and that he would not respond quickly to the new reduced proposal.

Correspondents say that following Tuesday's election results the White House are adopting a wait-and-see approach.

Mrs Jones's reluctance to accept settlement has been attributed to the influence of her husband and her media adviser, who both urged her to go for a bigger deal.