State prosecutors in California have offered the five defendants in the HP spying case a plea bargain deal that would reduce their offences from felony charges to misdemeanours. 

The prosecution is allegedly willing to drop the more serious charges, as long as each of the five defendants pleads guilty to one misdemeanour.

The California Attorney General's office refused to comment on the plea deal, stating that it does not discuss negotiations openly. 

Stephen Naratil, who represents private investigator Brian Wagner, said that he was first approached over the deal by the California Attorney General's office in late December.

The scandal first came to light in September 2006, when an internal investigation at HP into boardroom leaks found that the company had illegally obtained information using private investigators.

The scandal caused the resignation of chairman Patricia Dunn, chief ethics officer Kevin Hunsaker and general counsel Ann Baskins.

The only conviction in the case so far happened on 12 January, when Wagner pleaded guilty to charges of identity theft and conspiracy.