Yahoo has settled a legal action brought by the families of Chinese dissidents who claim that their details were handed over to the authorities by the internet giant.

The suit filed in the US District Court for the Northern District of California has been settled on undisclosed terms.

Neither party has made a statement since the news was announced, but Yahoo has confirmed that it has agreed to pay the legal costs of the case.

"While the details of the settlement agreement are private, the issues raised in the lawsuit and during last week's Congressional hearings indicate some of the key points that were the focus of concern," said the World Organization for Human Rights, which brought the case.

"Some of these issues include the urgent need to secure the release, as soon as possible, of Shi Tao and Wang Xiaoning from prison, preventing further disclosures of internet user information that could lead to arbitrary arrest and torture, and the need to assist other prisoners who have been jailed as a result of the disclosure of identifying internet user information."

The case has been a public relations nightmare for Yahoo. The firm was savaged by Congress earlier this month, and some Congressmen likened the firm's conduct to that of the Nazis.

"After meeting with the families, it was clear to me what we had to do to make this right for them, for Yahoo and for the future," said Yahoo chief executive Jerry Yang.
"Yahoo was founded on the idea that the free exchange of information can fundamentally change how people lead their lives, conduct their business and interact with their governments.

"We are committed to making sure that our actions match our values around the world."