Lawyers to explain why Jackson ended contract case with sheikh

His legal team, led by Robert Englehart QC, must tell Mr Justice Sweeney the trial has been formally discontinued after just a handful of days in court.

The star's lawyers shook hands late last night on a settlement in principle with those representing Sheikh Abdullah, the second son of the King of Bahrain.

In a statement Jackson, 50, claimed he had been on the verge of boarding a transatlantic jet to bring him to London to give evidence this afternoon. But sources close to the case had predicted Jackson would climb down at the eleventh hour.

At first the cash-strapped former multi-millionaire had claimed to be too ill to travel. After the doctors gave him the all-clear, Jackson's lawyers subjected the sheikh to fierce cross examination in the witness box.

The singer caved in as he himself was due to face a grilling by the sheikh's QC, Bankim Thanki, over his financial affairs and personal relationship with the Arab ruler.

The court is unlikely to hear any details of the settlement. Jackson's lawyers are likely to have insisted on a confidentiality clause.

The deal marks the end of a bizarre collaboration between the star known as Wacko Jacko and the wealthy Arab sheikh.

Sheikh Abdullah bin Hamad bin Isa al-Khalifa told the court last week he had been introduced over the phone by the singer's brother Jermaine. He agreed to lend Jackson $1million (£670,000) during the star's child abuse trial in California before they had met in person.

The first approach for money came from Jackson's personal assistant who asked for $30,000 (£20,000) to pay utility bills at the Neverlands ranch which the singer has now been forced to sell, the court was told.

The sheikh said the money he gave to Jackson was part of a business venture and that he wanted it back.

He invited Jackson with his children and entourage to stay in Bahrain. He lavished money on him, building a recording studio, which he believed would be used to record albums using material the sheikh had helped to write.

In court, the Bahrainian claimed they entered into a "combined rights agreement" under which the star was committed to repaying $7million (£4.7million) out of royalties earned on the albums.

Jackson has always insisted there was no valid contract and the money was a gift. He pulled out of the deal in May 2006 after 11 months and has not seen the sheikh since.