Google has slashed in half its controversial plans to become the world’s biggest online library in a legal move to appease critics, including China, the US Justice Department, authors and publishers.

In an American legal filing made close to midnight on Friday, Google and its publishing allies set out their latest proposal for a plan that will allow Google to distribute millions of books online.

The agreement is designed to settle a 2005 class action lawsuit accusing the search engine of copyright infringement after it started scanning vast libraries of books.

Google and its partners argue the plan will give people access to thousands of books that are out of print or difficult to find. The original proposal also sparked anger in Europe and China, where critics said Google was flouting local copyright laws and exploiting authors.

The new proposal will cover only books that were registered with the US Copyright Office or published in Britain, Australia or Canada. The cut means that 95% of non-US books will now not be covered by the settlement, which will be binding only in America.

Dan Clancy, engineering director in charge of Google Book Search, said: “Within US libraries it’s acknowledged that more than half the titles held are non-English books. This reduces the scope of the settlement by at least 50% and probably more than that.”

Clancy said Google was talking to authors and publishers across the world in an attempt to eventually broaden its plans.

Last week, it began discussions with the Writers Union in China, but those discussions and any agreements will be separate to the American deal now in court.

“We are disappointed, but we are also comfortable with where we are at today,” said Clancy. He said Google would begin discussions with European rights holders as it seeks to broaden the scope of the project.

The Publishers Association, whose members include Macmillan and Hachette, welcomed the changes. Simon Juden, chief executive of the PA, said: “I’m confident that the revisions we were able to negotiate on condition of our support are beneficial for all UK publishers who choose to remain in the settlement. The alternative, which would have been to withhold our support and have UK works excluded from the scope of the settlement, would have deprived UK rightsholders of control over how their works are exploited.”

The new agreement also addresses concerns about so called “orphan works”, books whose rights are in doubt. Money from orphan works will go to an independent fiduciary body charged with protecting the interests of the rightsholders.

A deadline is now expected to be set by a US court for groups to object to the modifications.

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