Charlotte Church is set to walk away with up to £500,000 in damages when she settles her phone-hacking case against the News of the World out of court this week.

According to reports, the 26-year-old singer and her parents are on the verge of coming to an agreement with News Group Newspapers, the owner of the now defunct tabloid.

The case of Church and her parents, which alleges that the News of the World published upsetting stories about them after having their voicemail messages hacked by a private investigator, was due to be heard on Monday but this latest development means the publisher could avoid the high court.

Church, her mother, Maria, and her stepfather, James, who have until now refused to accept damages and costs from News Group Newspapers, are the last outstanding plaintiffs out of 60 victims of the scandal to take action against Rupert Murdoch's tabloid.

Sources said that NGN was likely to pay £380,000-£500,000 in damages and legal costs to the three plaintiffs.

The settlement comes days ahead of the launch of the first edition of a Sunday edition of the Sun.