Hollywood actress CAMERON DIAZ settled for substantial libel damages from an American tabloid yesterday, after the publication falsely claimed she was cheating on then-boyfriend JUSTIN TIMBERLAKE with a married man.

The CHARLIE’S ANGELS star, 34, filed a lawsuit against publishers American Media Incorporated over the offending article which appeared on the National Enquirer website in May 2005, with accompanying photos accusing Diaz of having an affair with MTV producer SHANE NICKERSON – the man behind her adventure TV show TRIPPIN’.

Lawyers for the National Enquirer told London’s High Court yesterday the publication accepted the allegations were unfounded and “ought never to have been published”. They agreed to pay the actress an undisclosed amount, and issued a public apology to Diaz, Timberlake, Nickerson and his wife for any distress their article may have caused.

Diaz previously settled a similar libel claim with British newspaper The Sun in July 2005, after it printed the same story.

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