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The firm has been accused of trying to hush-up cases of iPhones and iPods heating up or bursting into flames in the US and the UK.
Ken Stanborough and his daughter, from Liverpool, have accused the firm of trying to silence them with a gagging order after the child's iPod exploded and the family sought a refund.
Apple reportedly offered to pay the money to Mr Stanborough, but only if he kept the terms of the settlement confidential.
It has been reported that the device's lithium ion batteries could be the source of the problem.