Coca-Cola agreed yesterday to pay out a record $192.5m (£140m) to settle a racial discrimination suit brought by 2,000 African-American employees, who alleged they had been systematically held back from promotions and pay rises.

Coca-Cola agreed yesterday to pay out a record $192.5m (£140m) to settle a racial discrimination suit brought by 2,000 African-American employees, who alleged they had been systematically held back from promotions and pay rises.

In an agreement reached in the United States federal court, the Atlanta-based soft drinks company said it would pay out some $113m in direct compensation and another $43.5m that would go towards increasing salaries.

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The company also agreed to pay for a seven-member watchdog body to oversee its employment and labour-relations practices.

The suit, originally brought in April last year, has proved a humiliation for Coca-Cola's chairman, Douglas Daft, who complained in May of the plaintiffs' "totally excessive money demands". Yesterday, Mr Daft was a model of deference to the court and his litigants. "It is a fair, equitable agreement," he said. "It comes from the belief that we need to lead, not just comply, on such issues."

The case was brought by four named employees and another 2,000 included in a class-action suit - the total number of African-Americans who worked for Coca-Cola between 1995 and June this year. They claimed that unfairly negative performance reviews and blocks on both promotions and wage increases amounted to systematic discrimination.