David Bain's bid for compensation has moved a step forward, but details of an agreement with Justice Minister Amy Adams are being kept under wraps.
Ms Adams yesterday confirmed judicial review proceedings had been discontinued after an agreement between the two parties.
The announcement means the Cabinet will resume considering Mr Bain's compensation claim and comes after his legal team last month held confidential discussions with Ms Adams.
Both parties declined to comment on the terms of the settlement and Ms Adams would not be drawn on whether the agreement involved an acceptance former justice minister Judith Collins had acted improperly in handling Mr Bain's bid.
Long-time Bain supporter Joe Karam said the judicial review was dropped by Mr Bain after Ms Collins was replaced as minister.
''We have achieved our goal, which was: stop Judith Collins from whitewashing and bulldozing through her personal view on the Bain case.''
They were grateful Ms Adams had ''decided to approach it in a principled way''. Mr Karam accepted it could still be some time before the Government made a decision.
''You could say that David Bain and Joe Karam are used to waiting, so we will just plug on.''
He was hopeful they would get the desired outcome.
''The evidence that proves David Bain is innocent is bulletproof and, on that basis, I would expect the Government to accept that evidence for the quality that it is.''
Mr Bain's lawyer, Michael Reed QC, said he could not comment further on the terms of the settlement or why the Government wished to keep them secret.
''I'd love to, but I can't,'' he said.
In announcing the decision, Ms Adams issued a statement saying the Cabinet could now resume its consideration of Mr Bain's compensation claim.
The Cabinet agreed in February 2013, at Mr Bain's request, that consideration of his application would be put on hold, pending determination of the judicial review proceedings.
The agreement did not resolve Mr Bain's underlying compensation claim, just the separate judicial review process.
''While the details of the agreement are confidential, I can confirm that there was no contribution made towards Mr Bain's compensation claim as part of this discontinuance.''
Ms Adams said there would be a further announcement regarding consideration of the application in due course.
''I plan to discuss next steps with my Cabinet colleagues over the coming weeks.''
She declined to say whether the agreement involved an acceptance Ms Collins acted improperly, saying in a statement to the Otago Daily Times the settlement arose from a judicial settlement conference and were therefore confidential.
''As all statements during such conferences are confidential ... it would not be appropriate for me to comment further.''
Mr Bain was seeking a judicial review over Ms Collins' handling of his compensation bid after she questioned the quality of a report by former Canadian Justice Ian Binnie.
The Binnie report found ''on the balance of probabilities'', Mr Bain was innocent of murdering his parents, two sisters and brother in Dunedin in 1994 and had been wrongfully imprisoned and ordered he be paid compensation for spending more than a decade in prison.
However, Ms Collins ordered a review of the report by former High Court Judge Robert Fisher, who concluded it ''would be unsafe to act upon the Binnie report''.
Mr Bain was convicted in 1995. He spent 13 years in jail before being acquitted in a retrial in 2009.
He is seeking compensation for his wrongful imprisonment.
A spokeswoman for Ms Collins said it was a matter for the minister responsible. It would be inappropriate to comment.
