Eager to cool the debate over copyrighted text online and anxious to make some money, Google and the publishing industry announced Tuesday that they have settled their three-year legal battle over the internet giant's book search program.

Under an agreement reached by Google, the Authors Guild and the Association of American Publishers, librarians and the public will have an easier time tracking down millions of out-of-print books. At the same time, Google and the book business will have greater opportunities for online sales.

"We're trying to create a new structure where there will be more access to out-of-print books, with benefits both to readers and researchers and to the rights holders of those books — authors and publishers," Richard Sarnoff, chairman of the publishers association, said Tuesday in an interview.

"This is an extraordinary accomplishment," Paul N. Courant, university librarian for the University of Michigan, said in a statement. "It will now be possible, even easy, for anyone to access these great collections from anywhere in the United States."

Under the Google Print Library Project, snippets from millions of out-of-print, but copyrighted books have been indexed online by Michigan and other libraries. Google has called the project, which also scans public domain works, an invaluable chance for books to receive increased exposure.

But in a class-action suit filed in 2005, the Authors Guild alleged that Google was "engaging in massive copyright infringement." A year later, publishers also sued, citing the "continuing, irreparable and imminent harm publishers are suffering … due to Google's willful (copyright) infringement to further its own commercial purposes."

The settlement expands the amount of text to be scanned, makes it available for free online at "designated" libraries, available for subscription for colleges and universities, and allows readers to pay for full online access of copyrighted works.

Google is to contribute $125 million US, including about $34.5 million US for a nonprofit Book Rights Registry that will store copyright information and co-ordinate payments. Google will also pay for the millions of copyrighted books already scanned — $60 US per complete work to the rights holder — and for the legal fees of the Authors Guild and publishing association.

Any sales, subscription and advertisement revenue that occur through the search program will be divided 63 per cent and 37 per cent, respectively, between the copyright holders and Google.

"This may be the biggest book deal in publishing history," guild executive director Paul Aiken said Tuesday.

If approved by the U.S. District Court in Manhattan, the settlement will end a conflict that had been closely followed by the publishing industry as it examines how copyright law should work on the internet and whether sales are hurt or harmed by access to digital text.

Authors and publishers once strongly resisted free online books, but over the past year, they have softened. During the year, entire works have been made viewable and even downloadable for free, including Charles Bock's novel Beautiful Children and works by Paulo Coelho and Neil Gaiman.

The court is expected to rule on the agreement by next summer.

Since emerging as the internet's most influential and profitable company, Google has fended off a variety of claims alleging that some of its success has been built on the legally protected work of others.

News organizations have either filed lawsuits or threatened legal action against Google for including snippets of copyright stories on its site. Companies have also sued Google for selling the right to show advertisements tied to a trademarked term entered into its search engine. In 2005, The Associated Press and Google disagreed on intellectual property issues, but were able to reach an amicable business solution in January 2006.

Google still faces an even bigger copyright battle over its popular video-sharing site, YouTube. Viacom Inc. is seeking at least $1 billion US in damages in a lawsuit alleging that YouTube has illegally profited by tens of thousands of pirated clips from copyrighted shows such as South Park, SpongeBob SquarePants and MTV Unplugged.

Google, which bought YouTube for $1.76 billion US two years ago, has adamantly denied the allegations and blasted Viacom for threatening to stifle free expression on the internet. A trial date in that New York federal court case still hasn't been scheduled.

Publishers are increasingly counting on the internet to help increase sales, and Tuesday's announcement comes as the industry wonders, and worries, how badly it will be hurt by the shrinking economy.

Publishers have often boasted that books are "recession proof" because of their low cost compared to other forms of entertainment. But the market has been soft for years and a division of Random House Inc., the Doubleday Publishing Group, said Tuesday that 16 employees had been laid off, including a receptionist and members of the marketing and art departments.

"I believe I would be speaking for many others when I say that we do not see ourselves as being immune from the recession," said spokesman David Drake of Doubleday, which has struggled with commercial disappointments such as Andrew Davidson's highly publicized novel, The Gargoyle, and by the continued absence of a follow-up to Dan Brown's mega-selling The Da Vinci Code.

Drake said he had no news on when Brown would finish his novel, reportedly about Freemasons, and rumored for years to be near completion. The Da Vinci Code came out in 2003.

"Many people, including the retailers, would like to have a new Dan Brown," Drake said.