The British subsidiary of one of the world's largest multi-level marketing groups has defeated a Government attempt to close it down after claims that it was operating unlawfully.

Amway (UK) was cleared at the High Court of "dream selling", of operating an unlawful lottery and of being an unlawful trading scheme.

However, the company had to give several legal undertakings including not to recruit further sales agents until it had publishing details of their average earnings and to scrap its annual charge to register as a distributor.

The company, part of a worldwide group with three million sales agents and an annual turnover of $6.5billion (£3.3billion), had been the subject of a Government investigation last year.

John Hutton, the Business Secretary, attempted to force the closure of the company after investigators allegedly found that just six per cent of sales agents were earning 95 per cent of the bonus income.

But Mr Justice Norris dismissed the petition to wind up the company after hearing that it had modified its business model to address the Government's concerns and had given a series of undertakings about its future conduct.

Amway, established in this country for 30 years, sells over £10 million of products in the UK annually, including cosmetics, jewellery, water filters, dietary supplements and cleaning products, through a multi-level network of more than 30,000 independent business owners (IBOs).

The judge said one of the risks of such a set-up was that it might be exploited as a pyramid selling scheme, making money by recruiting others rather than trading in good or services. One of the main objections to Amway was that, in the past, people were being "sold a dream "which had very little prospect of becoming reality.

Very few IBOs made any profit, and many made a loss through having to pay a £28 registration and an annual £18 renewal fee, the court heard.

But Mr Justice Norris said: "Amway is openly selling a proposition to prospective IBOs, not providing careers advice.

"In inviting people to make a modest financial but significant personal commitment, it has a legal duty not to misstate the facts on which the decision to commit will be made," said Mr Justice Norris. "By a fine margin, it has complied with that duty."

The High Court heard that between 2001 and 2006 the number of British agents not earning any bonus income at all varied between 69 per cent and 78 per cent. In 2004/5 only 74 agents out of 25,342 earned more than £10,000 in bonuses.

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