The state has spent more than $18 million for attorneys, expert witnesses and other legal costs the past four years fighting a lawsuit that challenges the adequacy of its public school system -- and the case remains months from trial, records show.

Then-Gov. Gray Davis decided not to have state attorneys handle the suit after it was filed in May 2000, opting instead for a $325-per-hour law firm, O'Melveny & Myers, that defended Exxon Mobil Corp. after an Exxon tanker spilled millions of gallons of oil into Alaskan waters in 1989.

But as the fees continue to mount, years of legal warfare with the American Civil Liberties Union over the schools suit took a new turn recently when Richard Riordan, the state's new secretary for education, became personally involved in trying to hammer out an agreement, sources said.

Rae Belisle, executive director of the state Board of Education, declined to discuss any ongoing talks. But both sides desire a settlement and "there's a genuine interest in taking care of the needs of all kids," she said.

"I think there may have been some informal conversations that (Riordan) may have had," Belisle said. "I don't know that they were formal settlement negotiations the way that most lawyers would think of them."

Mark Rosenbaum, an ACLU attorney, would neither confirm nor deny that negotiations have occurred. But Riordan has shown a sincere interest in holding schools accountable for substandard conditions, he said.

"I believe that Secretary Riordan is genuinely committed to making certain that the most disadvantaged kids in the state have the basics of an education and that there be genuine accountability," Rosenbaum said.

Several developments in recent years raise hopes for a settlement, sources said, including mandates in the federal No Child Left Behind Act of 2001 to have credentialed teachers in every classroom by 2006 and to provide a statewide accountability system that intervenes, assists and ultimately sanctions schools that receive federal poverty funds and consistently perform poorly.

Another key change involves California's ongoing multibillion-dollar budget crisis: Put simply, when it comes to major education reforms, there is much less money to fight over than there was when the suit was filed in May 2000.

Riordan recently called for a complete and dramatic overhaul of California's funding formula for public schools. Rosenbaum said the proposal could be an "important component" in resolving the legal dispute.

"I do think this has the vision of being part of a program that could result in the sorts of reforms we're talking about," he said.

Riordan's approach would provide a uniform sum of money for every child, then add standard supplemental amounts for those with special needs, such as the poor.

Campuses would receive more discretion in spending decisions. Such a system would overturn California's practice of providing differing base amounts per student -- and uneven supplements -- for the state's 1,000 school districts.

"It has the potential of solving lots of inequities that exist in the state," Rosenbaum said. "(But) we'd have to see what the entire program is, and we'd have to see what the other elements are and how it's going to be implemented."

The ACLU suit, filed on behalf of dozens of public schools, contends that many of the state's poorest families are served by substandard schools whose problems range from inexperienced teaching staffs to inadequate numbers of textbooks and filthy or broken-down facilities.

In court documents, the state does not concede the litany of graphic deficiencies -- including one high school campus where some students reportedly hadn't taken a book home for homework in three years. But if such problems exist, the responsibility lies with local school districts, the state has argued.

The ACLU's class-action lawsuit, Williams v. California, seeks to force the state to set minimal standards for "educational necessities" and school facilities. It also demands an accountability system that promptly corrects deficiencies and provides each child with a fair opportunity to excel.

Riordan's office referred media inquiries about the suit to Belisle.

California's defense has consumed roughly $14.6 million in paid or pending bills, much of it for O'Melveny & Myers' services. The attorney general's office has spent an additional $3.67 million, including $700,000 for expert witnesses requested by the private firm, state records show.

The total of $18.3 million, if used for other educational purposes, could pay the employee costs of nearly 350 beginning teachers or more than 1,000 part-time aides for one year.

The ACLU suit claims that the state is violating students' constitutional right to an education by ignoring campus inequities.

Scores of alleged deficiencies are cited by the suit, including campuses where:

* No student in any world history class had a textbook for an entire year.

* Some classes had up to 54 students but only 30 seats.

* Thirty-seven of 51 teachers were new to the profession and had no prior classroom experience.

* A student body of 1,200 students stood in long lines to use toilets in the lone bathroom for girls or the two for boys.

The Davis administration filed a countersuit, pending but currently inactive, against every school district named by the ACLU.

"If students in any school district are receiving a constitutionally inadequate education ... each school district possesses the authority and ability to fix the problems alleged but has not done so," the state argued in legal briefs.

For years, debate has raged over the extent to which state government should dictate how local districts use their funding.

A new state law, SB 92, requires every school to keep its bathrooms fully operational, cleaned regularly and stocked at all times with toilet paper, soap and paper towels or hand dryers.

Recommendations in a 20-year master plan for education, released in 2002, call for the state to adopt "clear, concise and workable" standards for school facilities -- and to require districts to comply.

Belisle is hopeful that a relatively new statewide accountability system can provide a framework for resolving other ACLU concerns. It targets schools that receive federal poverty funds or are struggling in a voluntary program for low-performing campuses.

Participating schools with consistently low test scores are evaluated by outside experts. If intensive efforts to improve performance fail, potential sanctions get progressively severe over a period of several years. They range from permitting student transfers to reassigning teachers or reopening the campus as a charter school.

Rosenbaum said the accountability program is too small, however, to consider as a potential breakthrough in the pending lawsuit.

"The program I saw was a tiny drop in a very large bucket," he said.