The offer is a volte-face for Mr Grasso, who has in the past demanded an apology from Eliot Spitzer, the New York attorney-general, who filed the lawsuit last May.

However, the former NYSE chairman appeared to have changed his stance when he attended a deposition hearing in New York yesterday. As he entered the hearing Mr Grasso said that he believed there could be no “winners or losers” in the case.

“To the extent that we could find a payout that is mutually beneficial to the institutions, to me and my family . . . to the attorney-general . . . I think would be in everyone’s best interest,” he said.

Mr Grasso was forced to leave the NYSE after 35 years in September 2003 for accepting the package worth $187.5 million. When the details of the deal were revealed, angry shareholders and regulators demanded his resignation.

Mr Grasso initially resisted but was later forced out by the NYSE board.

The NYSE is a not-for-profit organisation and is governed by strict New York State laws under which the chief executive of a not-for-profit organisation is not entitled to “excessive” pay.

Mr Spitzer filed his lawsuit, claiming that not-for-profit law had been breached, eight months after Mr Grasso’s resignation and while investigations into who approved the package were continuing. Kenneth Langone, a close associate of Mr Grasso who was head of the NYSE compensation committee, was also named in the lawsuit, as was the NYSE.

Yesterday’s deposition hearing was held to take witness statements from Henry “Hank” Paulson, the chief executive of Goldman Sachs, who was on the NYSE board and helped to lead the campaign to force Mr Grasso out.

It has emerged in recent days that Mr Paulson may have known about Mr Grasso’s pay deal earlier than he admitted. Mr Grasso and Mr Langone took the unusual step of attending the hearing and were expected to confront Mr Paulson to ask why he fought so hard to have the former chairman removed from his job.

A lawyer close to the hearings said: “These depositions have been going on for two months and Dick [Grasso] has never come down before. It is anticipated that he may have something to say to Paulson during the proceedings.”

Mr Grasso had not questioned Mr Paulson before the hearings broke for lunch yesterday.

Mr Langone said outside the hearing that he was still opposed to a settlement. “If the attorney-general is prepared to apologise to me . . . then we can all go home,” he said.

A source close to Mr Spitzer said that although a request for settlement talks had not been made, the attorney-general would be open to discussions.

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