Shenzhen-based Foxconn, which manufactures iPods for Apple Computer, and the China Business News had apologized to each other for the trouble caused by the lawsuit, Xinhua said.

Foxconn International Holdings is an arm of Taiwan's Hon Hai Precision Industry.

In a joint statement the two sides also agreed to cooperate to protect workers' rights, the news agency added.

Hongfujin Precision Industry, a wholly-owned Foxconn subsidiary, had sued over a June 15 report in the newspaper that accused the company of violating workers' rights by forcing them to work overtime for low pay.

The suit, one of the biggest defamation cases filed in China against reporters, had sparked concern about journalists' rights.

Hongfujin had already reduced its claim for damages from 30 million yuan ($3.77 million) to a symbolic 1 yuan.

Apple said last month that Foxconn let employees at the China plant work longer hours than allowed by Apple's code of conduct and that it had taken steps to address the issue.