Responding to its inspector general, the Labor Department said it "strongly disagrees with the report's overall characterization of the effectiveness of the Wal-Mart child labor settlement agreement."

The department said the inspector general had wrongly given the impression that Wal-Mart had been permitted to avoid all penalties for violations of wage and hour laws by bringing its stores into compliance.

Even though department officials asserted that the agreement was much like that with other companies, Mr. Heddell found that the agreement between Wal-Mart and the Wage and Hour Division "was significantly different from other agreements entered into by W.H.D." and "had the most far-reaching restriction on W.H.D.'s authority to conduct investigations and assess" fines.

Representative George Miller, the California Democrat who asked the inspector general to investigate the settlement, said the report showed that the Bush administration was seeking to do favors for a powerful friend and a major Republican contributor in Wal-Mart.

"The Bush Labor Department chose to do an unprecedented favor for Wal-Mart, despite the fact it is well known for violating labor laws, including child labor laws," Mr. Miller said. "The sweetheart deal put Wal-Mart employees at risk, undermined government effectiveness, and further undermined public confidence that the government is acting on its behalf."

Mr. Heddell said he did not find that the agreement resulted from improper pressures. "Nothing came to our attention indicating evidence of influence or pressure from internal or external sources," he wrote.

Martin Heires, a Wal-Mart spokesman, said, "We think it's important to note that the inspector general's office found that the agreement is in compliance with federal law."