Tasmanian timber company Gunns has dropped legal action against a group of conservationists.

The company took action in 2004 against 17 environmentalists and three organisations, claiming they had hurt its business by protesting, trespassing and damaging machinery.

Now Gunns has announced it will pay $155,000 towards the legal costs of the four remaining defendants to end the proceedings.

One of the individuals being sued Adam Burling, who works for the Huon Valley Environment Centre, says it is a win for free speech.

“The case had the potential to set a dangerous precedent where anyone who spoke out against any development in Australia could potentially be sued,” Mr Burling said.

“Gunns pursued us for more than five years and has spent millions of dollars hounding us through the courts … it’s an embarrassing backdown.”

Australian Greens Senator Bob Brown says the Government should introduce legislation to discourage corporations from pursuing dissenting individuals.

“We need governments to legislate, as the Australian Capital Territory has done and many states in the US, to prevent actions like this against citizens who are taking a reasonable and opposite point of view to developers in the great debates about the environment,” Senator Brown explained.

Gunns says the settlement is a commercial decision.