"Charlie's Angels" and "Shrek" star Cameron Diaz accepted a public apology and undisclosed libel damages from a newspaper over an untrue story about her and a married TV producer.
The article in the Sun tabloid said Diaz and father of one, Shane Nickerson, "enjoyed more than just a professional relationship",
Diaz's lawyer Simon Smith told libel judge David Eady.
Smith said the article alleged that his client, who is the girlfriend of singer Justin Timberlake, and Nickerson were seen stopping behind bushes in Santa Monica, California.
"A headline appeared on the front page of the Sun on 12 May 2005 which sensationally posed the 'Riddle of Cameron's 3-min snog with a pal... and it wasn't Justin: see page 9'," Smith said.
Smith said the Sun newspaper now accepted the incident "involved no more than Ms Diaz giving a friend a goodbye hug and any suggestion of a romantic involvement is entirely untrue and without any substance whatsoever".
The lawyer said the publication of the article had damaged Diaz's personal and professional reputation and had caused distress to her, Timberlake, Nickerson and his wife.
The Sun apologised to the Hollywood star and accepted the allegations were unfounded and should not have been published.
Earlier this week a photographer who took topless pictures of Diaz before she was famous was convicted in a US court of charges stemming from what prosecutors said was a bid to blackmail the star.
John Rutter, who was accused of faking Diaz's signature on a 1992 release form and telling the actress he would publish the steamy, bondage-themed photos unless she bought them back, was convicted of attempted grand theft, forgery and perjury.
- REUTERS
