'X Factor': Source Says Cheryl Cole Out, Will Be Paid

The bizarre drama surrounding British pop singer Cheryl Cole's on-again, off-again gig as a judge on the U.S. version of the X Factor appears to be coming to a close -- and it's off.

According to a high-level industry source, after engaging in some legal brinksmanship the powers behind the show have concluded that it's best to pay Cole the reported $1.5 million she was owed under her contract and say goodbye.

The source says it was clear that the chemistry wasn't working among the judges from the start and that Cole lacked chemistry with Paula Abdul. "There was no spark," this source says. "It was nobody's fault. It just didn't work." The source believes that it was Simon Cowell who concluded that a change was necessary.

While the hope was to ease Cole back into a role in the U.K. show, word of the decision to drop her from the American version leaked and Cole became extremely upset, this source says. Very quickly, her camp stopped communicating with producers at Fremantle.

This source says Fremantle balked at paying out Cole's contract and hoped to induce her to quit. That was the impetus behind pressing her to return to the U.S. and leaking word that she was being offered the judging job once again. But apparently after extensive conversations involving Cowell, Fremantle and Fox, a decision was reached to pay off Cole's contract and end the drama.

Fremantle did not respond to a request for comment. Fox declined to comment. Cole's rep tells THR that "Both parties are planning on abiding by the contract that was agreed to." A Cowell rep could not be reached.