The Italian government has paid compensation of $190,000 each to the families of two Indian fishermen allegedly shot dead by Italian marines in February, lawyers said Tuesday.
The two marines, who are being held in custody in the southern Indian state of Kerala, were deployed as guards on an Italian oil tanker when they were accused of shooting dead the fishermen after mistaking them for pirates.
The Italians face murder charges in the Indian courts, and the cash settlement will not affect the criminal case lodged against them by the Kerala state government.
C. Unnikrishnan, a lawyer representing the widow of one of the fishermen, said the Italian government had paid 10 million rupees ($189,500) each to the families of Selestian Valentine, 45, and Ajesh Pinky, 24.
"We have settled the compensation case and signed the agreement to withdraw the (civil) cases with the consent of the High Court of Kerala," Unnikrishnan told AFP.
"The Italian marines will have to face prosecution in the criminal case pending against them," he added.
Italy has challenged the murder charges against Massimiliano Latorre and Salvatore Girone, and it has approached India's Supreme Court saying their detention is illegal.
Italy says the marines should be prosecuted in their home country because the shootings occurred on an Italian-flagged vessel in international waters, but India says they took place in waters under its jurisdiction.
The fate of the marines has threatened to erupt into a diplomatic row, with Italian Prime Minister Mario Monti last month warning his Indian counterpart Manmohan Singh against any prosecution.
Italy has expressed its regret over the shootings off the coast of Kerala but said the Indian fishing crew behaved aggressively and were repeatedly warned before shots were fired.
The fishing boat's owner said the marines fired without provocation.
Armed guards are increasingly deployed on cargo ships and tankers in the Indian Ocean to tackle the threat from Somali pirates, who often hold ships and crews hostage for months demanding multi-million dollar ransoms.
The Indian Supreme Court hearing into Italy's petition is expected to resume next week.