Federal prosecutors and defense lawyers for former U.S. House of Representatives Speaker Dennis Hastert are negotiating a possible plea deal on charges that he tried to hide large cash transactions as part of a hush-money scheme, a top Illinois U.S. attorney said on Monday.

Hastert, 73, was charged in May with illegally structuring large withdrawals of cash to evade detection. Federal prosecutors allege he promised to pay $3.5 million to an unnamed individual from his hometown of Yorkville, Illinois, to conceal past misconduct. He has pleaded not guilty.

Lawyers for both sides appeared before U.S. District Judge Thomas Durkin on Monday to ask for more time to file pre-trial motions, and told the judge they were trying to work out a deal that would avoid going to trial.

"In open court this morning there was acknowledgement by both parties that there have been plea discussions," Zachary Fardon, the top federal prosecutor for the Northern District of Illinois, told reporters after a speech at the City Club of Chicago.

Hastert, who is out on bond, was not in court on Monday because the judge said he did not have to appear. The next date in the case is a status hearing on Oct. 15, and Hastert does not have to be present for that either, the judge said.

Durkin told the lawyers that he would set a trial date if they could not resolve the case soon, local media reported.

The defense has until Oct. 13 to file pre-trial motions, including a motion to dismiss the case.

Hastert was the longest-serving Republican U.S. House speaker, a position he held from 1999 to 2007.

The indictment of Hastert does not say what underlying alleged wrongdoing he was trying to keep quiet, but unnamed law enforcement officials have told a number of media outlets that it involved sexual misconduct.

(Reporting by Fiona Ortiz; Editing by Susan Heavey and Eric Walsh)