Ms Stewart looks set to return to American television screens

Ms Stewart is in the fourth month of a five-month jail term for lying to investigators about a share sale.

The Trump deal will see Ms Stewart head her own version of Mr Trump's show, "The Apprentice", in which aspirants compete for an executive post.

In this case, the prize will be a job at Martha Stewart Living Omnimedia.

The firm which bears Ms Stewart's name is now controlled by her daughter, under a proxy agreement that Ms Stewart can revoke once she regains her liberty.

Mr Trump has tried to trademark his catchphrase - "You're fired!"

The close ties between its branding and the personality of Ms Stewart have led some to question its future performance.

But the company's shares are trading at sky-high levels despite the tribulations of its founder - not least because the adulation of her fans appears not to have dimmed.

'Good friends'

Few details have emerged about the exact nature of the programme in which Ms Stewart will take the starring role, and no broadcast date has been announced.

But Mr Trump said he had been discussing a possible spinoff with executive producer Mark Burnett for some time.

"I'm a good friend of Martha's," he said. "I have been for a long time."

But the friendship may not extend to the catchphrase - "You're fired!" - which Mr Trump uses to end each show and has tried to trademark.

"She's probably got her own expression that's different from what I do," he said.

Mr Burnett said preparations for the show might start during the period of house arrest which will follow Ms Stewart's March release date.