The High Court yesterday struck out an application by Smart Telecom for an injunction to prevent Eircom cutting Smart's connection to its network after the two sides reached an agreement.

Following several hours of consultations, Michael Collins SC, for Smart, told Ms Justice Mary Finlay Geoghegan that agreement had been reached between the parties in relation to the injunction application on certain terms.

He handed those terms to the judge but they were not read out in court. Ms Justice Finlay Geoghegan made an order striking out the motion for the interlocutory injunction on the terms agreed and gave liberty to either party to apply to enforce the terms of the agreement.

The application for the injunction had been sought pending the outcome of the full hearing of proceedings brought under the Competition Act 2002 in which Smart alleges Eircom is abusing its dominant position in the broadband market.

This case relates to access by Smart to the local loop, the connection between Eircom's exchanges and individual customers. This case is continuing.

Earlier this year, Eircom sought a security payment of €4.9 million from Smart, which in turn offered €2 million.

Under the terms of yesterday's agreement, Smart will provide a rolling security deposit of €2.5 million.

Smart welcomed yesterday's outcome and said that it cleared the way for the competition case.

"We now look forward to the full hearing of our case against Eircom," the statement said.

Eircom also welcomed the settlement.