Google and the state of Connecticut have reached an agreement that won't force a courtroom showdown over Google's Wi-Fi spying scandal.

Connecticut Attorney General George Jepsen

Last year former Connecticut Attorney General Richard Blumenthal (now representing the state in the U.S. Senate) started an investigation of Google over its admission that its Street View cars had collected so-called "payload data," including e-mails and passwords, during the years it mapped the country's streets. In December Blumenthal issued a civil investigative demand that would have compelled Google to turn that data over to Connecticut, but Google protested the order and the two parties reached a settlement over that dispute, the attorney general's office announced today.

"The stipulation will allow Google and the state of Connecticut, and the 40-state coalition it is leading, to begin negotiations to resolve the data collection issue without going to court to enforce the Civil Investigative Demand, equivalent to a subpoena, issued in December on behalf of the state," current Attorney General George Jepsen said in a statement (PDF) released by his office. As part of the settlement, Google confirmed that it had collected private information during its Street View project, although that's something it admitted long ago.

The settlement means that Google and the attorneys general led by Connecticut will likely hammer out another agreement regarding the data, which Google has resisted turning over to government authorities in the U.S. The company has repeatedly apologized for the Street View program but that hasn't deterred countries around the world from attempting to punish Google as well as a class-action lawsuit pending in California.