Kyodo News issued reports from May to June 2004 that Tokyo-based Bangladeshi businessman Islam Mohamed Himu, now 35, had told police he had close ties with a senior al-Qaeda member, according to the ruling.

The reports also said Himu, who managed a telecommunications company in Japan, possibly used his firm as an underground financial source for the Islamic militant organisation.

Tokyo District Court presiding judge Jun Abe said in the ruling: "There is no evidence of truth (in the reports) nor adequate reasons to believe they were the truth.

"Kyodo News only interviewed the investigative authorities but not the man at all," the judge said.

He awarded compensation of 1.65 million yen (14,000 dollars) to Himu, who said his business had been badly hurt by the media coverage.

Himu, who had demanded 11 million yen, said he was pleased with the decision.

"I was happy to hear the ruling," Himu told AFP. "I was hurt so much mentally. Everyone makes mistakes, but once they realized they made mistakes they should apologize."

Kyodo News Deputy Managing Editor Shuichi Ito expressed regret that the court did not accept the news agency's argument that it later reported Himu was cleared of the allegations, according to a Kyodo dispatch.

Other Japanese media outlets also reported on the alleged al-Qaeda link. Himu said a court would rule in October on his separate lawsuit against Nippon Television.