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Wang Xiaoning was sentenced to ten years in prison last year for 'incitement to subvert state power' after he emailed electronic journals advocating democratic reform and a multi-party system.

In the complaint filed in US District Court for Northern California, Wang and his wife Yu Ling charged the Internet firms turned over details to prosecutors that helped identify him to authorities.

'While in custody, plaintiffs were subjected to torture and cruel, inhuman or degrading treatment, including arbitrary, prolonged and indefinite detention, for expressing their free speech rights and for using the Internet to communicate about democracy and human rights matters,' the filing says.

The suit, advanced by the World Organization for Human Rights USA, based in Washington DC, claims Yahoo! benefited financially by working with authorities. China is the world's second largest Internet market.

'Defendants had every reason to know and understand that the electronic communication user information they provided to authorities could well be used to assist in the infliction of such abuses as arbitrary arrest, torture, cruel, inhuman or other degrading threat and prolonged detention and/or forced labour,' it says.

In a statement, Yahoo! said it was distressed that Chinese citizens had been sent to prison for expressing their views on the Internet.

'However, the concerns raised about

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the Chinese government compelling companies to follow Chinese law and disclose user information are not new,' it said. 'Companies doing business in China must comply with Chinese law or its local employees could be faced with civil and criminal penalties.'

The lawsuit came on a day Yahoo! shares fell more than 11 per cent after the Internet firm's earnings announced on Tuesday fell below expectations.

The suit names Yahoo!, its Hong Kong subsidiary and Alibaba.com, China's largest e-commerce firm, as defendants. California-based Yahoo! bought a 40 per cent stake in Alibaba for $1 billion (500 million pounds) in a 2005 deal.

Yahoo! said the US government should seek to lobby for political prisoners in China.

'We call on the US Department of State to continue making this issue of free expression a priority in bilateral and multilateral forums with the Chinese, as well as through other tools of trade and diplomacy, in order to help secure the freedom of these dissidents,' the firm said.

Yahoo! has been criticised on a number of occasions for allegedly providing information that led to the arrest of Chinese dissidents. In April 2006, for example, Reporters without Borders said it has a copy of the verdict that put Jiang Lijun behind bars for four years in 2003 because of a series of online pro-democracy articles, and that evidence leading to conviction was provided by Yahoo!, through its Chinese partner Alibaba.

In August of last year MPs criticised all three of the leading Internet search companies - Yahoo!, Google and Microsoft - for collaborating with Chinese authorities' efforts to censor the Net. The House of Commons' Foreign Affairs Committee said that 'the collaboration of Western Internet companies in the censorship and policing of the Internet for political purposes is morally unacceptable'.