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In 1991, following Apple Computer's decision to include digital music (MIDI) hardware in Macs, they signed a confidential agreement limiting Apple Computer's activities in the music field. Earlier this year Apple Corps filed writs in California and London alleging that the computer maker had violated this, writs that included brief snippets of the original agreement.

According to those who have seen the California papers, the extracts reveal that although Apple Computer was prohibited from selling

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or distributing music in a physical form, such as CD, it was given freedom in the digital sphere.

'So long as there is not a use of the Apple Computer marks in distributing physical CDs...the use of software to distribute music seems to be within a fair reading of the contract,' Barry Felder, chief litigator at New York law firm Brown Raysman, told MacNewsWorld.

If true, then any new settlement could fall a long way short of the £30mn figure that has been touted. In fact it could put Apple Computer in a very strong position, only having to pay Apple Corps a share of the meagre profits of the iTunes Music Store. The payment could rise, however, if Apple Corps is successful in persuading the iPod-owning judge in the case that it also deserves a cut of the profits from the portable player.

Alternatively, Apple Computer could give Apple Corps a share in the future profits, in return for the rights to The Beatles' back catalogue, the Holy Grail of online music.