Imelda Marcos has agreed to give the Philippines 60 percent of the money she has in five Hong Kong banks if the government drops a lawsuit against the former first lady in California, an official said Thursday.

David Castro, chairman of the Presidential Commission on Good Government, said President Corazon Aquino's administration will drop the $5 billion suit if its share of the Hong Kong money exceeds $200 million.Marcos would admit no guilt to charges of embezzlement.

If the agreement is carried out, it would be the first known settlement between the government and the Marcoses.