John McLean: "The wrangling could continue for years to come"

The deal covers a group of 9,500 victims who have fought for compensation in a 13-year legal battle in the Hawaii, United States.

Mr Marcos had fled to Hawaii after being ousted from power in 1986. He died in Honolulu in 1989.

This is the first time in history that the leader of a country has been forced to pay damages to people abused in this way, the victims' lawyer Robert Swift told the BBC.

"The result is both historic and fair," Mr Swift said.

Imelda Marcos has claimed the remaining money

But the settlement is less than 10% of the of $1.9bn that was originally awarded by a Hawaii court in 1995. The payment was blocked when the Marcos accounts were frozen.

James Linn, a lawyer who represented Mr Marcos's widow, Imelda, descibed the settlement as a "good deal".

It was not immediately clear how much each individual plaintiff would receive. Some lawyers in the case estimated about $16,000 each but others put the figure at $11,000, which could be the amount after lawyers' fees are deducted.

John McLean reports from Manilla

The money will come from funds the Marcos family accumulated in Switzerland, which are now held by the Philippines National Bank.

The deal must be given final approval by the Philippines Government as well as courts in the United States, Switzerland and the Philippines.

Fight over remaining millions

So far nobody has managed to get their hands on the $500m that Mr Marcos allegedly hid in Swiss bank accounts.

The money is claimed by the Marcos victims, but also by the Philippine Government and by Mr Marcos' widow, Imelda, and their children.

If the government wants all the money, it must prove in court in the Philippines that the money was illegally acquired - something it has so far failed to do.

Alternatively the government and the Marcos family must agree to divide it up between them.

Imelda Marcos's lawyer said he assumed the remaining millions would now be "somewhat split" between the government and the family.

But the BBC Manila Correspondent John McLean says the new settlement with the victims is a step towards a final settlement, but he says the wrangling could continue for years.

The Marcos family lawyer has stressed that none of the family have ever been sued or prosecuted for human rights violations.