Google has been forced to abandon its ban on religious organisations placing anti-abortion ads on its site after it was sued by a pro-life charity.

Google settled out of court with The Christian Institute, a UK-based non-denominational charity, yesterday and will now allow religious groups to place factual and campaigning ads about abortion. The new policy will apply world-wide with immediate effect.

The Christian Institute wanted to advertise with Google by paying so that when the word "abortion" was typed into the search engine, a link to a web page on its views would pop up on the right-hand side of the screen.

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The link reading "UK abortion law - news and views on abortion from the Christian Institute" would enable users to click on it to access the institute's website. The institute had hoped to advertise its online articles on pro-life issues ahead of the Human Fertilisation and Embryology Bill being debated in the House of Commons this summer.

However, Google refused to display the ad in March because its policy banned the advertising of sites that mixed "abortion and religion-related content".

The Christian Institute started legal action against Google on the grounds that it was infringing the Equality Act 2006 by discriminating against Christian groups. The charity argued that Google accepted ads for abortion clinics, secular pro-abortion sites and secularist sites which attack religion. It demanded damages, costs and permission to display the ad.

A spokesman for the Christian Institute, Mike Judge, said that while the exact terms of the settlement were confidential, the charity was "absolutely delighted" at the outcome and to have its ad online yesterday. "It is a victory for common sense," he said. "We just wanted to display some factual information in the run up to the Embryology Bill going through Parliament.

"Obviously it's a controversial subject and we have conservative Christian views but we are never extreme in our language so we were very shocked to be blocked from advertising for use of inappropriate content. I think this is a victory for all religious groups that will benefit many people in the future."

A spokesman for Google said the case had prompted a review of its policy to ensure it was fair to all advertisers.

"The issue of abortion is an emotive subject and Google does not take a particular side. Over the past few months we have been reviewing our abortion ads policy in order to make sure it was fair, up to date and consistent with local customs and practices. Following the review we have decided to amend our policy, creating a level playing field and enabling religious associations to place ads on abortion in a factual way."