Former chief financial officer of Enron, Andrew S Fastow, is in advanced negotiations with the government on a deal under which he would plead guilty and agree to a 10-year prison sentence, even as a Houston judge rejected a proposed plea bargain for his wife.

Under the deal, Fastow, who would be the highest-ranking Enron official to admit wrongdoing and cooperate with the government, would help investigators find out what other top Enron executives knew about a scheme to manipulate the company's earnings.

Lawyers for Fastow (42), whose trial on money laundering, fraud and other criminal charges are scheduled for April 20, met with prosecutors in Houston on Wednesday, The Washington Post reported on Thursday, quoting sources familiar with the probe.    

However, the status of the plea negotiations of Fastow's wife, Lea W Fastow, also 42, was in doubt yesterday after US District Judge David Hittner rejected a deal that would have put her in prison for five months and ensured that she would be free to care for the couple's two young sons while her husband served his sentence. Lea is scheduled to go to trial on February 10 on tax and conspiracy charges.

The judge did so because he wanted more say in the length of her sentence, according to a source familiar with the judge's decision, the paper said.

It was unclear how Hittner's ruling would affect Andrew Fastow's plea negotiations, since, sources said, he agreed to make a deal only if his wife received a short prison sentence.

Prosecutors have been trying to build a case against former Enron chief executive Jeffrey K Skilling and former Enron chairman Kenneth L Lay, by securing the testimony of key subordinates. Fastow had previously refused overtures from the Justice Department's Enron task force.

"A cooperative plea agreement opens all kinds of doors for the government that for almost two years have been sealed shut," said Robert A Mintz, a former Federal prosecutor not involved in the Enron case. "Andy Fastow has always been the big prize the government wanted to bring home. If in fact he has agreed to cooperate, we can expect to see some significant movement in this case in the near future."

Separately, prosecutors plan to announce charges against Richard A Causey, Enron's former chief accounting officer.

Prosecutors and regulators at the Securities and Exchange Commission are relying in part on help from David W Delainey, who headed two of Enron's biggest units. Delainey pleaded guilty to insider trading in October and faces a maximum sentence of ten years in prison, although he is likely to get a reduced sentence in exchange for cooperation.