MP3.com has agreed to pay Universal Music Group $53.4m to settle its copyright infringement lawsuit.

Universal now becomes the last of the big five record companies in the US to resolve legal actions against MP3.com for alleged music piracy.

Unlike its rivals - Sony, BMG, EMI and Warner - Universal had previously refused to settle out of court, but under a new deal it has received the right to buy a 20 per cent stake in the online music provider.

Universal has also agreed to license its music catalogue to MP3.com. Its record labels include A&M, Decca, Island, Def Jam, Motown, Philips and Polydor. MP3.com had previously agreed to pay $20m each to Sony, BMG, EMI and Warner, as well as license their music libraries.

Michael Robertson, chief executive at MP3.com, said that his company agreed to the settlement because "it gets us out of the courtroom and into the business of delivering digital music".

While the Universal settlement is good news for the music companies and for the My.MP3.com service that has been at the centre of the copyright row, there are still a number of outstanding legal complaints from smaller independent labels.

However, Robertson said that he did not believe the company's total liability would exceed $170m.