I have created a class file database.php which handles all the sql queries and connecting to database. I store username and password for the database in a variable (which is easily seen if one gains access to the php file).
I want to encrypt that username and password so that even after having that php file one is not able to have an idea of the original username and password.
Please help me as I am in need of some idea desperately.
Thanks
This can hardly be done. You need the password in a decryptable form to send it to the database. Any such form will in some way be readable by a person who gains access to the .php file.
The common sense approach is to keep the configuration files outside the we broot as a basic security measure, and prevent outside attacks through properly securing the server. Hundreds of thousands of web sites run that way, without additionally encrypting their sensitive data in the way you describe.