NEW YORK (Bloomberg) - Google Inc.'s settlement of a lawsuit over its book-scanning program that is being probed by anti-trust regulators will help competitors by laying the groundwork for accords with writers and publishers, the company's top lawyer said.

The settlement means companies like Yahoo! Inc. and Microsoft Corp. will have "the clarification of issues around digital rights between publishers and authors", David Drummond, Google's chief legal officer, said on Monday in an interview.

Google is to share profits from book sales and ads with authors and publishers. The program may make the company, already the operator of the most-used Internet search engine, the biggest online source of copyrighted out-of-print books.

The $125 million settlement needs court approval, and the Justice Department said July 2 it is examining the impact on competition.

In resolving the class-action lawsuit, Google tackled issues over digital rights to books by creating an independent registry to mediate between authors and publishers, a benefit to competitors, Mr. Drummond said.

With its Google book program, the company is creating an online database of millions of books by scanning titles at universities and libraries. In the 2005 suit, the Author's Guild, Pearson plc.'s Penguin unit and other publishers claimed copyright infringement.

The groups support the settlement, saying it is fair to authors and may generate new interest in out-of-print books.

Jan Constantine, general counsel of the Author's Guild, said on Monday the agreement encourages competition because the registry can make agreements with other companies.

"The registry can actually undercut Google any time it wants to with a competitor," Ms Constantine said. "The registry has total autonomy to enter into any kind of arrangement with another vendor who might have more to offer than Google - a better product, a more focused product, a niche product."

Google, based in Mountain View, California, has said it is not opposed to other companies' digitising books and reaching deals with authors and publishers.

"The principal barrier is their own unwillingness to undertake a digitisation program," Mr. Drummond said. "They could enter into negotiations and work through rights issues with authors and publishers in precisely the same way we did it."

Microsoft spokesman Jack Evans did not immediately return a call for comment. Kim Rubey, a Yahoo spokeswoman, did not immediately provide a comment when reached by phone.

In November, the court gave preliminary approval to the accord. Thousands of US authors have until September 4 to opt out of the settlement. A ruling on final approval before US District Judge Denny Chin in Manhattan is set for October 7.

The program would allow readers to search for and buy whole books or individual pages. Google has not announced how much it will charge the public. Under the accord, copyright owners can set the price if they wish. Google will provide US libraries with free access to the database.

The Google Book project, started in 2004, includes Harvard University, the New York Public Library and about 10,000 publishers. The project includes books whose copyrights have expired and newer ones that would be scanned under separate deals with publishers.

Authors and publishers would have the final say on whether their copyrighted works could be used in the program.

Google would keep 37 percent of revenue from online book sales and advertisements that run next to previews of book pages. It would pass on the remainder to the registry, which would charge a fee and leave the rest for the copyright holders to collect.