A US law firm is dropping a class-action suit against IBM over its alleged business ties to the Nazi German regime during World War II.

The action will be "voluntarily dismissed", said law firm Cohen, Milstein, Hausfeld & Toll in a statement yesterday.

The firm announced the lawsuit last month, charging IBM with 'aiding and abetting crimes against humanity' by providing the punch-card systems, called Hollerith machines, used to catalogue and process victims of the Nazi concentration camps.

By dropping the suit, the firm seeks to speed payment of compensation to millions of victims of the Nazis, said the plaintiffs' lead attorney Michael Hausfeld.

German businesses have paid five billion marks ($2.3bn) to the Remembrance, Responsibility, and the Future Foundation, a fund to compensate victims of the Nazi regime.

The German Federal Government will match this sum, but payments have been delayed for many months by ongoing cases filed in US courts, and won't be made until the businesses are assured of immunity from future lawsuits.

Even though the foundation plan does not cover lawsuits against US parent companies like IBM, Hausfeld said the plaintiffs are dropping the suit "in order to eliminate any obstacles German industry believes would hinder such payments to victims of the Holocaust".