Lay, Skilling and Causey had been scheduled to be tried together on 17 January on conspiracy, fraud and other charges related to the scandal-ridden company's collapse more than four years ago.

The deal on Wednesday leaves Lay and Skilling with another opponent rather than an ally who has been part of their united defence front since the trio was first indicted last year.

After Causey's plea, the judge granted a defence request for a two-week delay, pushing the trial for Lay and Skilling to 30 January.

Causey will serve seven years in prison and forfeit $1.25 million to the government, according to the plea deal.

As part of the deal, Causey cannot later ask for a lesser sentence, but if the government is happy with his co-operation, prosecutors can ask that it be reduced to five years.

The maximum penalty for securities fraud is 10 years in prison and a fine of $1 million or twice the amount illegally gained, followed by three years of probation.

Formal sentencing was set for 21 April.

False statements

The agreement included a five-page statement of fact in which Causey admits he and other senior Enron managers made false public filings and statements.

"For the remainder of his life, [Richard Causey] will regret the damage and the hurt that so many people suffered"

Reid Weingarten,
Causey lawyer

Sim Lake, a US district judge, said: "Did you intend in these false public filings and false public statements, intend to deceive the investing public? 

"Yes, your honour," replied Causey, who said little during the short hearing, appearing calm, whispering to his attorneys and answering questions politely.

His attorney, Reid Weingarten, said Causey reached the deal because it was the right thing to do.

"Today, Rick Causey, a very decent, honourable man, began the process of putting behind him the unfortunate Enron episode," Weingarten said.

"All the while, and for the remainder of his life, he will regret the damage and the hurt that so many people suffered as a result of this tragedy."

He said that Causey signed a plea agreement, not a co-operation agreement, but that he will work with prosecutors.

"What is true to the extent that he has any involvement in any upcoming legal proceedings, he will do one thing: He will tell the truth, because that is who he is, that is what he should do and that is what he is going to do," Weingarten said.

30 charges

Causey, the government's 16th co-operating witness in exchange for a plea, had faced more than 30 counts of conspiracy, fraud, insider trading, lying to auditors and money laundering.

Many of the charges against Causey overlapped with the 35 counts of fraud, conspiracy, lying to auditors and insider trading pending against Skilling.

The pair are accused of conspiring with others to fool investors into thinking a wobbly Enron was healthy in the years leading to its December 2001 crash.

Some of Causey's charges also overlap with the seven fraud and conspiracy counts pending against Lay, in which the former chairman is accused of perpetuating the ruse after Skilling's abrupt resignation in August 2001.

Skilling and Lay maintain that they neither committed nor knew of any crimes at Enron, and both have pleaded not guilty.