Simon Cowell is reported to have agreed to pay out £63 million in child support.
Music mogul Cowell is expecting his first child with Lauren Silverman - the estranged wife of his friend Andrew Silverman - and is said to have pledged to give her £3 million a year until the youngster turns 21 after he took legal and financial advice over the so called "messy" situation.
A source told the Daily Star Sunday newspaper: "He wants to ensure he does the right thing for her and their baby as well as resolving this mess.
"Simon wanted to know exactly where he stands and to minimise the damage this will do to his bank balance.
"He has a good relationship with Lauren at the moment but when you're as wealthy as Simon, you can't take any chances. Money changes people.
"Simon has warned he won't be taken for a ride just because he's rich.
"He's more than prepared to be fair and generous but he's no mug."
Simon has been named in divorce papers filed by Andrew - who has seven-year-old son Adam with Lauren - and it is claimed the 'X Factor' boss has "happily agreed" to cover his former friend's legal costs if he drops an adultery claim in favour of a no contest divorce.
Andrew has been spotted at the lavish New York home he shared with Lauren - who stands to receive between $3 and $4 million in the divorce under the terms of their pre-nuptial agreement - and their son over the last few days, but friends insist there has been minimal communication between the estranged couple.
One pal told the New York Post newspaper: "Andrew stayed at the house to create some normalcy for their son.
"There was no talk about the divorce settlement. That is being handled by the lawyers. There was minimal conversation between them. It was done purely for their child."
Meanwhile, Simon has jetted off for a month-long break in St. Tropez, France, with a group of friends.
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