New York Times reporter Judy Miller broke her silence and agreed to testify before a federal grand jury last week. This followed tense, often acrimonious negotiations that began after special Justice Department prosecutor Patrick Fitzgerald signaled he intended to reimpanel a new grand jury--a move that could have kept Miller in jail for another year and a half, say two lawyers close to the case who asked not to be identified because of the sensitivity of the talks. A federal judge sent Miller to jail on July 8 for refusing to talk about her conversations with her source, who, it was disclosed last week, was Vice President Dick Cheney's chief of staff, Lewis (Scooter) Libby. Fitzgerald indicated he would not let the matter drop when the grand jury, investigating the leak of covert CIA agent Valerie Plame's identity, expires in late October. Instead, he would keep his long-running probe open with a new grand jury. The sobering prospect spurred fevered negotiations among lawyers to find conditions that would satisfy both Miller and Fitzgerald. What Miller wanted was a direct, personal assurance from Libby that he had no problem with her testifying about two conversations they had in July 2003. That finally came on Sept. 19, in what participants described as an "awkward" four-way conference call that included Libby, Miller (patched in on a jailhouse phone) and their lawyers. "I'm sorry you're in jail, Judy," Libby said, according to an account provided by his lawyer, Joseph Tate. "I am, too. The food is not very good," Miller replied. Libby then told Miller he wanted to "encourage" her to testify to "help both of us... get this matter behind us." At one point, Libby added "something like, 'We miss you'," according to Tate's account.

Tate's claim that his client was willing to provide a personal assurance all along drew a sharp rebuke from New York Times lawyer Floyd Abrams. In a blistering Sept. 29 letter faxed hours before Miller's release, Abrams protested that in conversations more than a year ago Tate agreed that a written waiver signed by Libby authorizing reporters to talk about their conversations with him was "by its nature coerced" and that Libby's failure to sign it "would result in his dismissal." Tate calls Abrams's account "bulls--t." Tate acknowledges that Libby did indeed tell Miller that Iraq war critic Joe Wilson's wife (Plame) had arranged for Wilson to take a CIA-sponsored trip to Africa to probe reports that Iraq was seeking uranium for a nuclear bomb. But he says Libby did not know Plame's real name nor her undercover status at the CIA. Nor, he says, did Libby talk to Robert Novak, the columnist whose story outing Plame prompted the criminal probe in the first place. The week's developments left some lawyers involved scratching their heads about why Fitzgerald pressed so hard for Miller's testimony in the first place and whether her hard-line stand against testifying could have been avoided altogether. Fitzgerald, who is expected to wrap up his probe soon, had no comment.