Nortel said the proposed settlement would contain no admission of wrongdoing by the company or any of the defendants. It is based on the recommendation of a U.S. judge involved in the lawsuits, which are pending in federal court for the Southern District of New York, Nortel said.

The lawsuits stemmed from the Brampton, Ontario-based company's revised financial guidance in 2001 and restatement of its 2003 financial results and some quarterly results. The settlement is subject to Nortel's reaching a global settlement of all pending and proposed shareholder class actions against the company following the revised financials.

"Our intent is to achieve a fair resolution of these lawsuits and avoid a prolonged, uncertain and costly litigation process," said Harry Pearce, chairman of Nortel's board. "A final settlement would remove a significant impediment to Nortel's future success."

CEO Mike Zafirovski said that dealing with outstanding litigation and regulatory concerns facing Nortel, as well as effective corporate government, have been and will continue to be a top priority for Nortel. "Resolving these important issues will enhance the company's ability to focus on our transformation and renewal priorities and our customers," he said in a statement.

Nortel officials declined requests for interviews.