He rapped his hit "Mo' Money, Mo' Problems" with Nelly during Sunday's Super Bowl halftime show, but now Sean "P. Diddy" Combs (search) has less money - and at least one less problem.

The artist formerly known as Puffy yesterday settled a $3 million lawsuit that had been brought against him by his former driver, Wardel Fenderson (search), who claimed he suffered emotional distress when the hip-hop honcho forced him to flee cops after a shooting at a Midtown club.

The terms of the settlement, which was struck just as Combs was about to put on his defense in the fourth day of trial, are confidential.

Combs was scheduled to take the stand tomorrow.

Fenderson had been a part-time driver for the rap impresario for three months at the time of the Dec. 27, 1999 Club New York incident, when he sped away from the scene of a shooting and blew through red lights in a Lincoln Navigator carrying Combs, his then-gal pal Jennifer Lopez (search) and his bodyguard, Anthony "Wolf" Jones.

All four were cuffed after cops found a gun in the car. Authorities later charged Combs and Jones with weapons charges. They were acquitted at a criminal trial where Fenderson was the key witness against them.