Mayor Bill de Blasio and NYPD Commissioner William Bratton Thursday both blasted news that the city had settled for a mere $5,000 a multimillion-dollar lawsuit brought by a machete-wielding man shot and wounded by cops, with the mayor vowing that City Hall would be taking a hard line against what he called "ambulance chasers" who file "frivolous" lawsuits.

"What happened here was wrong. It shouldn't have happened," said an angry de Blasio. "It's a broken policy that we are fixing right now."

"It is outrageous," Bratton told reporters at a different event. "Our cops work very hard trying to keep this city safe and if they are not going to be backed up by our city law office, we need to do something about that."

De Blasio and Bratton were reacting to a report in the New York Post that the city had settled the federal lawsuit brought by Ruhin Ullah, who was wounded by police during an incident in which he allegedly menaced them with a machete. Court records show that Ullah, who said in his complaint that he was emotionally disturbed by the incident, wanted $3 million in damages.

Ullah's attorney Scott Cerbin said that his client pleaded guilty to a charge of menacing an officer. Cerbin said that Ullah actually wanted to commit suicide during the June 19, 2010, incident in Brooklyn involving seven police officers.

"I opted to withdraw the case or settle for nuisance value because I couldn't prove the case," Cerbin told Newsday Thursday.

"My client had mental health issues," Cerbin said. "It was really a business decision for me and the city [to settle]."

A spokesman for the city Corporation Counsel confirmed that the case was settled for $5,000 on Jan. 21.

With Matthew Chayes