Lawyers representing Nigeria's federal government say they have begun work on an out-of-court settlement with U.S. pharmaceutical giant Pfizer in the legal dispute over a controversial clinical trial by the company in Nigeria. Gilbert da Costa reports for VOA from Abuja.

A Nigerian court has postponed to May 20 the case in which U.S. drugmaker Pfizer is seeking to quash a government report on a disputed clinical trial by the company,

The federal government and Kano state are suing Pfizer for a total of $8.5 billion and pressing criminal charges in connection with the 1996 testing of the drug Trovan on Nigerian children in the northern Kano state.

Eleven children allegedly died, and dozens of others suffered permanent health problems. Pfizer has rejected the charges. It says the alleged victims were afflicted by meningitis, not the drug.

Lead counsel for the federal government, Maryam Uwais, told reporters the Nigerian government has been approached by Pfizer and the U.S. government for a negotiated resolution.

She says while the Nigerian government is well disposed to settling the matter out of court, it will not back down on key demands.

"All I can say is that there has been an offer from them [Pfizer]. Which we found unacceptable and we made a counter offer," she said. "We are not averse to a reasonable settlement so long as it addresses the issues that have arisen from the trial. If they are able to address these issues to our satisfaction then there is no need for a trial. But whether it is possible or not will depend on how they conduct themselves and the offer they make. What has happened is that the government at that level intervened with our government and we were asked to sit down and settle; and they were now ready to make an offer."

Representatives of Pfizer stated their desire to resolve the dispute quickly to enable the firm focus on its core business operations in Nigeria.

Pfizer has meanwhile asked the federal high court in Abuja to set aside the report of a government panel which investigated the drug trial. The panel's conclusions form a key aspect of the lawsuit instituted against Pfizer.