A Taiwan-funded company has slashed a libel claim against two Shanghai journalists, who said workers at a plant making iPods were mistreated, from 30 million yuan ($3.77 million) to just 1 yuan, Xinhu

A Taiwan-funded company has slashed a libel claim against two Shanghai journalists, who said workers at a plant making iPods were mistreated, from 30 million yuan ($3.77 million) to just 1 yuan, Xinhua news agency said on Thursday.

An official at Hongfujin Precision Industry Co., a unit of Shenzhen-based Foxconn that manufactures iPods for U.S.-based Apple Inc. (AAPL.O: Quote, Profile, Research), said the company would also apply to unfreeze the journalists' assets, which include their homes, bank accounts and a car.

Foxconn is a unit of Taiwan's Hon Hai Precision Industry Co. Ltd.

"This is a victory for Chinese media," Weng Bao, one of the two reporters working for the Shanghai-based China Business News, was quoted as saying.

It was not immediately clear why the damages claim had been cut, but the China Business News had urged Foxconn to drop the case, saying in a statement provided to Reuters it "strongly condemned" the suit and would do whatever it could to support its journalists.

Foxconn had sued over a June 15 report in the newspaper that accused the company of violating workers' rights by forcing them to work overtime for low pay.

The suit, one of the biggest defamation cases filed in China against reporters, had sparked concern about journalists' rights.

The decision to cut the claim followed several days of public debate during which the two journalists set up their own blogs to put their side of the case.

"Nearly 2 million people had visited the blogs by the middle of Wednesday, mostly voicing support for the journalists," Xinhua said.

The official was also quoted by Xinhua as saying Foxconn would add the China Business News to the list of defendants in the libel case.

Apple said earlier this month that Foxconn let employees at the China plant work longer hours than allowed by Apple's code of conduct and that it had taken steps to address the issue.