(Reuters) - Hewlett-Packard Co agreed to pay $57 million to settle a lawsuit that accused the personal computer maker's former management of defrauding shareholders by abandoning a business model it had long touted.

The lawsuit was filed after former Chief Executive Leo Apotheker shocked investors on August 18, 2011 by announcing plans to refocus the company on business services and products.

He also revealed plans to scrap WebOS, whose rights HP had obtained when it bought Palm Inc in 2010; pay $11.1 billion for British software company Autonomy Plc; and possibly spin off HP's personal computer business. The company also halted sales of the TouchPad, after just seven weeks on the market.

"HP has reached a mutually acceptable resolution through a mediated settlement," said Sarah Pompei, an HP spokeswoman.

According to the proposed settlement, HP will deposit $57 million into an interest-bearing escrow account within 20 days of getting an approval by U.S. District Judge Andrew Guilford in Santa Ana, California.

The lead plaintiffs include the Arkansas Teacher Retirement System; the Labourers' Pension Fund of Central and Eastern Canada in Oakville, Ontario; the LIUNA National Pension Fund and LIUNA Staff & Affiliates Pension Fund in Washington, D.C.; and Union Asset Management Holding AG in Frankfurt, Germany.

"We are very happy with the settlement and are glad to have achieved this recovery for the affected HP shareholders," said Jonathan Gardner, co-lead counsel for the class.

In the midst of a multi-year turnaround effort intended to revive growth, HP is trying to reduce its reliance on personal computers and move toward computing equipment and networking gear for enterprises.

The case is Gammel et al v. Hewlett-Packard Co et al, U.S. District Court, Central District of California, No. 11-01404.

(Reporting by Supriya Kurane in Bangalore; Editing by Gopakumar Warrier)