Clinton Accuser to Drop Lawsuit : Politics: Larry Nichols says case alleging infidelity by presidential candidate has ‘gone way too far.’ Arkansas governor and wife will appear on TV.

MANCHESTER, N.H. —  A former Arkansas state employee whose lawsuit alleging marital infidelity by Bill Clinton helped trigger a crisis for the Arkansas governor’s Democratic presidential campaign announced Saturday night that he will drop the suit, saying the media “have made a circus out of this thing, and it’s gone way too far.”

The statement by Larry Nichols, released by Clinton aides after a speech by the candidate in New Hampshire, came as the governor and his wife, Hillary, readied for a potentially pivotal appearance tonight on the CBS-TV program “60 Minutes” to discuss allegations concerning their private life.

In his statement, Nichols said: “It is time to call the fight I have with Bill Clinton over. . . . I set out to destroy him for what I believed happened to me.”

Nichols, fired from his state job in 1988 for misconduct, sued Clinton over his dismissal and used his lawsuit to air rumors of adultery by Clinton. The lawsuit--in which Nichols named five women with whom Clinton allegedly had affairs--became the basis of a story last week in a supermarket tabloid, the Star, that set off the current scrutiny of Clinton’s private life.

That focus intensified Thursday when the Star released a second story in which Gennifer Flowers, an Arkansas nightclub singer, alleged a 12-year affair with Clinton.

Clinton has strongly denied Flowers’ allegations since they first surfaced. And Saturday night, Clinton aides contended that Nichols’ statement undercut the credibility of Flowers, who was one of the women named in the lawsuit.

“The only reason (the Star stories) came into being was the lawsuit, and now the man who brought it forward said it was a mistake,” said deputy campaign manager George Stephanopoulos

Clinton aides also said Nichols had approached them, and not vice versa, about dropping his lawsuit and issuing his statement.

Nichols could not be reached for comment, and his whereabouts were not known. But the Associated Press reported that he confirmed his statement in a phone call to one of the wire service’s reporters in Little Rock, Ark.

In the statement, Nichols never explicitly says that he believes his allegations of infidelity to be false, but he does refer to the charges as “rumors.”

In his statement, Nichols said that “when that Star article first came out, several women called, asking if I was willing to pay them to say they had an affair with Bill Clinton. This is crazy. . . . There are people out there now who are going to try to cash in.”

Nichols’ statement was released after a campaign rally in Manchester, where Clinton, in an apparent reference to the controversy that has dogged him for the past several days, told supporters: “Nobody gets to decide what this election’s about but you--the people of New Hampshire and the people of the United States.”

Clinton has expressed that defiant tone since Flowers’ allegations surfaced, arguing that the woman “changed her story” after being paid by the Star. Clinton aides noted that an attorney for Flowers threatened to sue a Little Rock radio station in 1991 when it alleged that she had an affair with the governor.

The editor of the Star, Richard Kaplan, has acknowledged that Flowers was paid for her story, but he has declined to say how much she received.

Kaplan said Saturday that he and Flowers, who is being kept in an undisclosed location by the Star, intend to hold a news conference in New York City on Monday to respond to questions about her allegations and Clinton’s comments on “60 Minutes.”

The decision by Clinton and his wife to appear on the CBS program culminated jockeying among three television networks to book him on news shows to respond to the adultery allegations.

“60 Minutes” offered the couple the opportunity to be interviewed on a special edition of the top-rated news program after the Super Bowl tonight--which will give them an estimated audience of 24 million TV households.

Until Friday, CBS had been planning to preempt “60 Minutes” with Super Bowl-related programs.

In exchange for the “60 Minutes” appearance, the Clinton campaign agreed to a demand by the program’s executive producer, Don Hewitt, that the governor cancel previously scheduled appearances on Cable News Network’s “Newsmaker Saturday” and on the ABC News program “This Week With David Brinkley.” Clinton had planned to appear with his wife on the CNN program and alone on the Brinkley show.

David Glodt, executive producer of the Brinkley show, said: “It disturbs me that a guy who is running for President is deciding back and forth” between programs.

Clinton campaign spokesperson Dee Dee Myers said: “We felt bad canceling CNN and the Brinkley program. But, in the course of our negotiations with CBS, they wanted exclusivity. The combined audience for ‘Newsmaker’ and Brinkley is a fraction of what we’d reach on CBS, and their audience is more of a political-insider audience than the national audience of ’60 Minutes.’ We felt it was in the best interest of the campaign (to choose the CBS program.)”

The couple is to be interviewed by “60 Minutes” correspondent Steve Kroft. The interview--which the network is promoting as a discussion by the Clintons of “their lives, their marriage and his campaign for the presidency”--will be taped this morning in Boston.

The Super Bowl--traditionally television’s highest-rated event--is expected to end at about 7 p.m. PST. Local stations on the West Coast have the option of airing the Clinton interview immediately following the Super Bowl or delaying it until after their local newscasts. A network spokesperson said KCBS-Channel 2 in Los Angeles has decided to air the program immediately following the game.

Times staff writer John J. Goldman contributed to this story.