The Greek courts have thrown out a case taken by the Government against two internet-cafe owners accused of breaking a controversial law introduced in July that bans people from playing computer games.

The ruling is the first of its kind in Greece and sets the courts on a collision course with the state, which is waging a campaign to stamp out illegal gambling, according to reports on the BBC.

The law, which was introduced by the Socialist government, threatens those who are found guilty of playing games with fines, confiscations of business licences and jail.

The government adopted the measure after numerous bar and arcade owners were found to have converted slot machines into illegal gambling machines. However, the text of the legislation does not discriminate between electronic games and gambling, and has raised concerns among the gaming community that police will crack down on "gamers".

The two internet-cafe owners and an employee, who won their case, were charged after police found some of their customers playing online chess and the popular multiplayer game Counter-Strike. If found guilty, they could have been sent to jail for three months and faced fines of up to $4,950 each, as well as losing their business licences.

Under Greek law, gambling is only permitted in licensed casinos - although illegal gambling is believed to be widespread.

The new law is being opposed by Greece's gaming community, which accuses the Government of taking the country back to the 1970s when individuals were arrested for playing cards at home.

Meanwhile, the Greek embassy moved to assuage the concerns of Irish holidaymakers by playing down the possibility that their children could be arrested for playing gameboys or other video games.

A spokeswoman for the Greek embassy in the Republic told The Irish Times yesterday that holidaymakers had nothing to fear from using their gameboys on the beach in Greece.

"They definitely won't be arrested if they bring their gameboys on to the beach. Many Greek children have done this," she said.

She said the law had been in force for two months and no one had been arrested for playing video games.

"The intent was to deal with illegal gambling. . . there seems to have been some confusion on the issue," she added.