Mr Lay had withheld 870 pages of documents from the US Securities and Exchange Commission (SEC) despite being subpoenaed by the regulator.

He had argued the papers were of a personal nature, and said he wanted to invoke his Fifth Amendment right against self-incrimination.

The agreement to hand the papers over came shortly before the issue was due to appear before a court in Washington.

Paper chase

The SEC has been investigating what Mr Lay knew of the activities which led to Enron's bankruptcy in December 2001.

It has already been searching through 23,000 pages of documents that Mr Lay has produced, and was prepared to go to court to get access to the remaining papers.

The SEC had been angered that Mr Lay had provided these same papers to Enron's court-appointed bankruptcy examiner under a confidentiality agreement.

Under the agreement reached between Mr Lay and the SEC, the information in the documents can be used for "any other action or proceeding against Lay."

Mr Lay has not been charged so far in connection with Enron's collapse.