Napster, the music website that has been forced to suspend its file-swapping operation, yesterday settled its legal dispute with rock band Metallica and rap artist Dr Dre.

Terms of the settlement were not disclosed but Napster is expected to pay the musicians a small cash fee, covering the costs of the litigation and infringement liabilities. It has agreed to filter out unauthorised works from the artists.

The settlement came as the company filed an emergency appeal against an order this week from a US district court judge, Marilyn Hall Patel, to shut down its service until it can guarantee that its systems can filter out all specific copyrighted material.

Napster has been working under a self-imposed shutdown this month to try to resolve technical glitches that prevent it from complying with the judge's order. The company says it can filter out 99.4% of unauthorised work.

Metallica and Dr Dre were rare among artists in filing individual lawsuits against Napster 18 months ago.

Howard King, a lawyer acting for both, told Hollywood Reporter: "Napster is on the way to dying but that was never what my clients were trying to accomplish. [They] wanted to bring public awareness to the rights of artists and stop people like Napster from trading on their property without their consent."

The musicians have said they will work with Napster on a legal subscription service. Napster is working to unveil such a service this summer. Hank Barry, its interim chief executive, offered an apology to Dr Dre: "We regret that we were not more sensitive to his concerns in the past."

Napster gained a huge following after its free service began in 1999. Legal woes started when it was accused of copyright infringement in a lawsuit brought by the Recording Industry Association of America.