Former International Monetary Fund leader Dominique Strauss-Kahn and a hotel maid have settled her lawsuit over sexual assault allegations that sank his political career and spurred scrutiny of his dealings with women on two continents.

I thank everyone who supported me all over the world. I thank God and God bless you all- Diallo

The housekeeper, Nafissatou Diallo, looked composed and resolute as New York State Supreme Court Justice Douglas McKeon announced the confidential deal.

Strauss-Kahn stayed in Paris and refused to discuss the settlement, which came after prosecutors abandoned a related criminal case because they said Diallo had credibility problems.

“I thank everyone who supported me all over the world,” said Diallo, who has rarely spoken publicly since the encounter between her and Strauss-Kahn in May last year.

“I thank God and God bless you all,” she added.

In a statement, Strauss-Kahn’s lawyers, William Taylor III and Amit Mehta, said the former diplomat was “pleased to have arrived at a resolution of this matter”. They credited the judge with “patience and forbearance” that fostered the agreement.

The lawsuit stemmed from an encounter in Mr Strauss-Kahn’s luxury Manhattan hotel suite.

Diallo, a 33-year-old housekeeper from Guinea, told police he forced her to perform oral sex, tried to rape her and tore a ligament in her shoulder after she arrived to clean his suite.

The 63-year-old, who has since separated from his wife, has said what happened was “a moral failing” but was consensual.

The allegations led to his arrest, forced him to resign his IMF post and cut off the Socialist’s potential candidacy for the French presidency.

The criminal case was dropped after prosecutors said they could not trust Diallo, saying she was inconsistent about her actions right after leaving his suite, and she told a compelling but false story of having been raped previously.

She said she always told the truth about Strauss-Kahn and would press her claims in the lawsuit. He called her suit defamatory and countersued for a million dollars.

The judge said he met Diallo earlier this year and talked with her about the prospect of settlement talks. The negotiations continued, with a lengthy discussion involving the judge late last month, and a final deal was sealed on Monday, Justice McKeon said.

“I want to say what a privilege it has been to work with all of you and to work on this case,” he told Diallo and the lawyers for both sides.

The judge said Diallo also settled a separate libel lawsuit against the New York Post over a series of articles that claimed she was a prostitute. The details of that settlement were not disclosed either. Diallo’s lawyer Kenneth Thompson called her “a strong and courageous woman who never lost faith in our system of justice. With this resolution, she can move on with her life”.

After she came forward, other sexual allegations emerged against Strauss-Kahn, who had been known as a womaniser but largely viewed as debonair.

French judges are to decide by December 19 whether to annul charges linking him to a suspected prostitution ring run out of a luxury hotel in Lille. He acknowledges attending “libertine” gatherings but says he did not know about any women getting paid to participate.

Another inquiry, centred on allegations of rape in a hotel in Washington DC, was dropped after French prosecutors said the accuser, an escort, changed her account to say she was not forced to have sex. French prosecutors have also looked into writer Tristane Banon’s allegations that Strauss-Kahn tried to rape her during an interview in 2003, a claim she made public after his New York arrest and he called imaginary and slanderous.

Prosecutors said they believed the encounter qualified as a sexual assault but the legal time frame to pursue her complaint had elapsed.

The fall from grace

• The US scandal erupted on May 14, 2011, when Nafissatou Diallo, 33, told police Dominique Strauss-Kahn attacked her at the Sofitel Hotel.

• Diallo, the daughter of an imam from Guinea, filed her civil lawsuit just weeks before the charges were dismissed, claiming Strauss-Kahn’s “sadistic” attack caused her physical and emotional damage.

• She said he emerged naked from the bathroom of his $3,000-a-night suite and forced her to perform oral sex.

• The accusation led to a frantic scramble by New York police to arrest Strauss-Kahn as he sat aboard a jet at John F. Kennedy International Airport, waiting to take off for France that night.

• The scandal forced Strauss-Kahn to resign as head of one of the world’s most influential international finance organisations, the International Monetary Fund, and wrecked his hopes of running for President in France. He was once seen as a front-runner for the Socialists. Instead François Hollande became the candidate and unseated President Nicolas Sarkozy.

• Diallo broke her silence in July 2011, while the criminal investigation was still active, revealing her identity in interviews to Newsweek and ABC News.

• Strauss-Kahn filed a $1 million countersuit against Diallo for defamation. He said the sexual encounter was consensual but admitted it was a “moral error”.

• The New York case also seemed to initiate a wave of other accusations against Strauss-Kahn, long known as the “great seducer” in French political circles.

• Prosecutors initially expressed confidence in the evidence, including DNA that showed a sexual encounter. But they dropped the case in August 2011 after developing concerns about Diallo’s credibility, including what they said were inconsistencies in her account of what happened immediately following the incident.

• Once cleared of criminal charges, Strauss-Kahn re-turned to France, where his legal troubles persisted.

• Strauss-Kahn and his wife, journalist Anne Sinclair, separated this summer.

• In recent months he has been quietly trying to resume his career, delivering speeches at private conferences and setting up a consulting firm in Paris.

• Strauss-Kahn and Diallo settled the civil lawsuit for an undisclosed sum on December 10, 2012.