The University of Toronto has settled a lawsuit with a British drugs researcher who alleged that an employment offer was revoked because he asserted a link between antidepressants and suicide.

Psychiatrist David Healy last autumn launched a libel action against the university and Toronto's Centre for Addiction and Mental Health, seeking damages of C$9.4 million (?4.14 million). It was the first action in Canada to allege denial of academic freedom.

Much of the settlement is confidential, but the university has agreed to appoint Dr Healy as a one-week visiting professor for three years in the faculty of medicine to show its support for the "free expression of critical views".

Dr Healy, director of the North Wales department of psychological medicine at Bangor, had been courted for two years for a job teaching psychiatry at the university and running the mood and anxiety disorders programme at the centre. But in November 2000, one week after Dr Healy gave a talk at the university linking anti-depressants with high suicide rates and attacking "corporate psychiatry", the offer was withdrawn. The centre determined he was "not a good fit" for the job. Prozac manufacturer Eli Lilly is one of a handful of pharmaceutical firms that fund the centre.

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Charles Nemeroff, a psychiatrist and paid consultant to a dozen drug companies, made his critical views of Dr Healy clear to centre personnel when he attended the lecture and - before Dr Healy was informed of Toronto's decision - spread word at a later conference that the offer would be rescinded.

Some eminent researchers in the field complained to university president Robert Birgeneau that the affair besmirched the name of one of North America's great research universities.

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The settlement, which emerged from mediation, means Dr Healy drops all litigation and the university faculty association abandons a related grievance. In a joint statement, Dr Healy accepted assurances that pharmaceutical companies played no role in the rescinding of his appointments.

Dr Healy told The THES this week he had never believed the pharmaceutical companies simply called the university to apply pressure. "Had they done that I might be in that job now," he said.