Schillings, the law firm acting on Morgan's behalf, reached an agreement at the end of last week. The sum is said to take into account loss of salary, pension rights and share options.
The amount is understood to have angered some Trinity Mirror shareholders, who pressed Sly Bailey, the company's chief executive, to fire the editor. The Mirror had to publish a front-page apology after it printed pictures alleging to show British soldiers torturing Iraqi prisoners. An investigation by the Ministry of Defence found the pictures were a hoax.
However, according to lawyers, Trinity Mirror would have to prove that Morgan knew the photographs were fake when they were published to avoid the payout. The company has never claimed Morgan knew the pictures were fake when he ran the story.
The news of the payoff follows Morgan's £1.2m deal with Ebury Press to publish his memoirs. Trinity Mirror declined to comment on the payoff.
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