Arms manufacturer EDO MBM Technology has reached a settlement with most of the anti-war protesters it named in its High Court bid to protect itself from alleged "harassment".

A High Court judge in London was told that EDO, based in Brighton, had agreed to pay the £200,000 costs incurred by the legally-aided defendants.

It was also agreed that an existing injunction banning certain activities by the campaigners should be varied so that it applies only to the individuals named by the company in its legal action and not to unnamed protesters in general.

The company, which makes bomb-release components for fighter jets used in Iraq, has spent almost a year attempting to stop demonstrations outside its factory.

Smash EDO spokesman Andrew Beckett said: "EDO did not anticipate what an organised and sustained fight we would put up.

"This has cost EDO a lot of money, generated the company huge amounts of negative publicity and been humiliating for it.

"The collapse of the injunction exposes how misguided the attempt to stifle legitimate protest has been.

"We have had to put up with arrests and continual police harassment but maintained our presence outside the factory.

"This is a major victory for civil rights and the peace movement.

"We will be here until EDO isn't."

EDO was granted an interim injunction last May banning activists from protesting within an exclusion zone around the factory.

The company's lawyers, Lawson-Cruttenden and Co, argued that regular noisy protests by activists amounted to harassment of employees.

As part of the settlement, each defendant stated that he or she "had not in the past intended, and had no intention in the future, to cause harassment to the company contrary to the Protection from Harassment Act".

Defence counsel Stephanie Harrison told the presiding judge Mr Justice Walker the settlement could have been reached on terms offered by the protesters last year.

It meant there was no restriction on the right to protest immediately outside the Brighton arms components factory.

"The principle had been established that any restrictions on the right to protest should only apply to identified individuals," she said.

Ceri Gibbons, one of the activists, said EDO had agreed to settle simply to avoid the prospect of a court hearing which would be "highly damaging" to the company.

The judge went on to hear argument on how the company's case should proceed for a permanent injunction against two remaining protesters, Christopher Osmond and Lorna Marcham, who have refused to accept the settlement.

The 1997 Protection from Harassment Act was originally written to protect women from stalkers, but in recent years has been used as a defence against unlawful activities by animal rights protesters.

The EDO case is the first time it has been employed outside the animal rights field.

Protests will resume outside EDO's gates next week in the form of a "naming the dead" ceremony for Iraq war casualties.