EMI is believed to have received up to $100 million (£50.8 million) from Bertelsmann to settle the long-standing litigation relating to Napster, the once illegal music-sharing website.

The British company refused to disclose how much money it had received after it revealed that Bertelsmann had settled late on Monday, but The Times has learnt that the figure paid out was well above $50 million and approaching $100 million.

Bertelsmann disclosed that it had set aside €101 million (£68 million) in its recently published accounts to pay legal costs, and EMI is thought to have received a significant proportion of this amount.

EMI was the only remaining music major suing Bertelsmann, after Vivendi’s Universal agreed a $61.2 million settlement last year. Sony and Warner Music are thought to be maintaining a watching brief.

The windfall is a boon to EMI, which has suffered amid a sharp decline in lucrative CD sales. The company issued two profit warnings this year, revealing that its second-half recorded music sales were down 15 per cent, prompting a takeover approach from Warner Music.

Bertelsmann, which owns a half-share in the recorded music venture Sony BMG, got caught up in the Napster battle, after it briefly lent money to the website at the beginning of the decade. Napster had modest assets and closed down and reinvented itself as a legal site in the face of mounting litigation.

However, Bertelsmann is Europe’s leading consumer media group and it became a target for legal action by music majors, who believed that its free music-sharing system had damaged the industry. Suing Bertlesmann became music companies’ only hope of salvaging some recompense from the situation.

Rival record companies expressed bafflement as to why EMI had refused to disclose the cash received, although it is not clear how much of the money will be swallowed up in lawyers’ fees. The British company, home to Joss Stone and The Rolling Stones, said that it was compliant with Stock Market requirements. EMI shares added 2p to reach 226.5p yesterday, as the market assumed that the Bertlesmann gain was not material.

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