Mysql daemon failed to start: unknown variable password=xxx

Mysqld don't restart anymore...In the log, the apparently obvious reason:

mysqld started
[Warning] Ignoring user change to 'root' because the user was set to 'mysql' earlier on the command line
[ERROR] /usr/libexec/mysqld: unknown variable 'password=mypassword'
mysqld ended

/etc/my.cnf there is nothing relevant and there is no such variable, which by the way has the correct mysql root password value in the message (!!!?):

[mysqld]
user=mysql
datadir=/var/lib/mysql
socket=/var/lib/mysql/mysql.sock
[mysqld_safe] 
log-error=/var/log/mysqld.log
pid-file=/var/run/mysqld/mysqld.pid

Mysql 5.0.95 on Centos 5.9. It worked ok before restarting!!