Google, the American internet search group, has reportedly backed down from a copyright battle with AFP after the Paris-based international news agency filed a $17.5 million (£9m) lawsuit in a Washington court.

AFP earns money by charging media clients subscription fees to republish the content produced by its global network of reporters and photographers, but said Google was reposting AFP headlines, text and news pictures on its Google News service without permission.

It said it had brought the case, requesting damages and interest, after repeated requests for Google to remove AFP's copyright content went unheeded.

But the French daily Le Figaro - in a report posted on the French version of the Google news aggregator - said today that Google was preparing to back down and remove all AFP content from its news service.

It quoted a Google spokesperson as saying: "Before any court decision, we are going to withdraw - in the next few days - AFP photos and text. We had thought that the 'shop-window effect' could be proftable for the French agency, as it is for many French media who have joined us."

Le Figaro also quoted an AFP official complaining that Google News was taking AFP articles and photos from its clients' websites without any agreement with the agency. "Sometimes Google goes so far as to use agency pictures which are unrelated to the text they are meant to illustrate - which is a situation that can pose copyright issues," the official said.

Neither AFP nor Google could immediately be reached to comment on the Figaro report. If the case is dropped, however, it will mean that a major web copyright issue remains unresolved.

Previous court rulings have generally found in favour of websites carrying hyperlinks to copyrighted content on grounds that links are the lifeblood of the internet and only serve to direct traffic to those sites. A US federal appeals court ruled in 2002 that websites may post and reproduced thumbnail photos, or reduced-size versions, but displaying full-sized pictures constitute a copyright violation.

The Google News aggregator was launched in 2002 on www.news.google.com and uses an automated system to collect headlines and key paragraphs from more than 4,500 news sources in English, some of which are illustrated with thumbnail photos.

Although newspapers generally welcome the extra exposure and site traffic, AFP appears to believe that Google is basically hitching a free ride on its content. The agency has more than 2,000 staff in 165 countries, producing news in seven languages.

Google's hand in any court battle would be strengthened by the fact that it does not carry any advertising on its Google News service - which means it cannot be accused of profiting directly from posting links to copyrighted content. The success of the service has clearly helped, however, to bolster Google's valuable pre-eminence among search engines.

Removing AFP content could prove to be a major technical headache for Google, The agency has 600 online clients with the right to republish its news - many of whom are picked up by the Google service. Although some of that content is clearly labelled as AFP, some is subsumed into wider newspaper stories or less clearly credited.

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