Facing a torrent of negative publicity over the handling of a pay equity dispute in Minnesota, the Norwegian government has settled its long-running battle with its former consular employee, Ellen Ewald, by agreeing to pay most of what a federal judge has mandated.

Norway agreed to pay Ewald and her lawyers $1,958,000 — 83 percent of what U.S. District Judge Susan Nelson had mandated following last year’s trial, which Norway lost.

Former Vice President Walter Mondale, who headed the consulate when Ewald was hired, was one of the key witnesses, acknowledging he had agreed to her lower salary when she was hired, but then lobbied Norway unsuccessfully to raise her pay when she protested the differential.

By settling the case, both sides averted a second legal battle before the federal Eighth Circuit Court of Appeals, which could have added considerable costs to both sides and more bad publicity for the Scandinavian country.

Norway, which has an international reputation for its support of pay equity, has been under pressure to resolve the case both inside Norway and from Norwegian-Americans, said Kjell Bergh, of Stillwater, former president of the Sons of Norway Foundation and a leader of Norwegian groups in Minnesota and nationally.

“They have taken massive heat,” Bergh said. “I think it has been pretty uniformly negative feedback.”

News in English, a Norwegian website, quoted various officials who criticized the case, including a state leader who called it “an embarrassment for Norwegian authorities.”

Asked about the backlash the case has engendered, the Norwegian Ministry of Foreign Affairs issued a statement Friday saying it was “pleased that the court dismissed Ms. Ewald’s allegations of harassment and other forms of improper behavior.” But it continued to defend its position.

“We have consistently emphasized that the wage difference between the two positions were well-founded and based on objective conditions,” it stated. “That said, we take note that the court found that this was not adequately documented.”

Ewald and her attorney, Sheila Engelmeier, continued to describe the outcome as a major victory, not only for themselves, but for the issue of pay equity.

Ewald is married to Terje Mikalsen, who chaired three major Norwegian companies before moving to the United States.

“We were fortunate to be in the position to fight on behalf of all women,” Ewald said on Friday. Under the settlement, she will receive $82,935 for lost wages and $30,000 for emotional distress, and her attorneys will be paid $1,845,065 for fees, costs and expenses. In reality, about $1.1 million of that amount will go back to Ewald, who covered many of the legal costs.

Nelson ruled that the Norwegian government violated Minnesota’s discrimination and equal pay laws by paying Ewald $30,000 less than a male employee though their jobs were comparable.

A Twin Cities native who had spent many years in Norway, Ewald was hired in 2008 for Norway’s new “model consulate” in Minnesota to focus on higher education and research at an annual salary of $70,000. Meanwhile, Anders Davidson, a former 3M employee, was hired to handle innovations and business development at a $100,000 salary. When Ewald learned about the disparity she complained, and her three-year contract was not renewed in 2011.

On its website, the Minnesota Department of Human Rights has a lengthy report on the case as a lesson to employers on how to avoid violating the state’s equal pay law.

Ingjerd Schou, a member of the Norwegian Parliament for the Conservative Party, hailed the settlement in a telephone interview from Norway on Friday, noting that the previous Labor government should have resolved it.

“Norway looked bad,” she said. “During all these years that this was going on, it has not been a good reputation for Norway and the Norwegian government.

“I think the Ministry of Foreign Affairs did discriminate. They were supposed to have the same salary and they didn’t. … I do think that Norway has to show that we treat women and men with equal competence with the same salary.”