Lockheed Martin Corp. is withholding half of its $60 million toxics settlement with 1,357 Burbank residents pending an investigation of who leaked details of the confidential settlement.

A company official said Monday that the decision to hold back the $30 million was made on the advice of the retired justice who mediated the terms, which included penalties for any recipients who disclosed the deal.

The settlements were negotiated with 1,357 people who said their health and property were damaged by six decades of aircraft manufacturing at the former Lockheed plant.

On Aug. 4, the Daily News reported details of the settlements, which included awards of up to $300,000 to the plant’s neighbors, 80 of whom reported cancer deaths or serious illnesses in their families.

Lockheed Martin did not accept any liability in the settlements, and has said that its operations at the plant, known as “B-1” and located just southeast of the Burbank Airport, never posed a health risk to the surrounding neighborhoods.

Lockheed Martin spokeswoman Maureen Curow said Retired Appellate Court Justice John Trotter recommended withholding the money until he could investigate how the confidentiality clause was breached.

She said the company will leave the details of the investigation up to Trotter.

“The judge is reviewing the breaches of confidentiality, why, where and how they came about,” Curow said. “Had there not been a breach of confidentiality, there wouldn’t have been an interruption in the payments.”

Trotter did not return repeated phone calls.

Last month Trotter held a press conference to discuss how the agreement – which took 1-1/2 years to reach – was crafted. He acknowledged then that it would have been difficult to keep the terms secret.

“It wasn’t realistic to think it would remain a deep dark secret,” Trotter said.

Curow said the decision to try to ferret out the leak was an effort to underscore the seriousness of the dispute resolution process, which she said was undermined by the disclosures.

The company has no timetable for the investigation, but hopes it will be concluded quickly. In the meantime, the unpaid funds are to be held “in escrow.”

Several residents who were expecting settlement awards declined to discuss whether they had received any, or whether they were reduced from the agreed-upon amount.

The disbursements were being handled by the residents’ attorney, David Casselman of Tarzana. Casselman did not return phone calls Monday.

Burbank city officials, however, said the settlement never should have been confidential and that now that it’s been disclosed it should be honored in full.

“I always felt it was a disservice to the people of Burbank to have a gag order,” said Burbank Councilman Ted McConkey. “If people were injured they have a right to talk about it.”

Burbank Councilman Bob Kramer said withholding the money was unfair.

“That’s really underhanded of Lockheed to do that,” Kramer said. “I think it’s bogus trying to keep everyone quiet.”

Sources told the Daily News that the confidential deal was intended to “buy peace” for Lockheed Martin. But disclosure of the deal angered residents who protested at public forums. Since then a federal class-action lawsuit claiming property damage has been filed against the company.

In recent documents, the company has said it will cost $295 million to rid its 425-acre Burbank land holdings – including the B-1 site – of groundwater and soil contamination, which has proved more extensive than officials first estimated.

The company has opened talks with the Pentagon to try to win reimbursements for up to 70 percent of the bill, claiming that its Burbank operations largely were done for the military and were performed within the environmental standards of the time.