The contractor overseeing demolition of the doomed Deutsche Bank tower was willing to pay the families of two firefighters killed in a blaze there "at least" $1 million each.

The families, which got the news from prosecutors explaining why they weren't going to indict contractor Bovis Lend Lease, rejected the cash.

The families of Firefighters Robert Beddia and Joseph Graffagnino also questioned why the Manhattan district attorney brought up the payment offer instead of Bovis.

"It has the appearance of impropriety to link the settlement or restitution paid by Bovis with them not getting indicted," said Michael Barasch, a lawyer for Beddia's sister, Barbara Beddia Crocco. "Thanks, but no thanks."

Graffagnino lawyer John Meringolo said the family preferred to go to trial.

"Cases are won and lost in the courtroom, and the Graffagninos intend to try this case," he said.

A source briefed on the discussions said prosecutors told the families Bovis' offer would "not be an attempt by Bovis to buy itself out of an indictment" and would be separate from any settlement the family might win in court.

"It was not meant to be insulting," the source said, while conceding the families could have perceived it as a way for Bovis to buy its way out of trouble. "It's not meant as a bribe, but as an expression of remorse and regret," the source said.

Bovis spokeswoman Mary Costello declined to comment, saying only, "Bovis has been cooperating with the DA since the investigation began."

The unusual offer came this week as prosecutors briefed the families on their year-old grand jury probe of the Aug. 18, 2007, Deutsche Bank fire.

Prosecutors told the families they would seek indictments against John Galt Corp., a subcontractor at the site, and 14 workers at the tower, but not against Bovis, the city or the state.

At the briefing, prosecutors indicated Bovis would make a "significant offer." One source said it was for $1 million; another said it was for "at least" that much.

Beddia lawyer Barasch said he worried that taking the money would hurt the family's suit against Bovis and others, including the city and the state.

A person briefed on the discussions insisted Bovis would have had to sign anagreement that the payment would not be a factor in the pending suits. "Itwould be a way for Bovis to express regret and remorse without conceding liability," the source said.

The source said indicting Bovis could domore harm than good because the company employs 750 in the city, noting the maximum penalty would be a $10,000 fine.

The source said such charges could cause the many government agencies that use Bovis here and around the world to drop the firm, possibly putting it out of business. The source also said prosecutors believe they could have "meaningful reforms if they got a deal with the city and Bovis, and they could not do that if they indicted the city or Bovis."

gsmith@nydailynews.com