The Central American neighbours have argued for years over their maritime boundary in the Caribbean Sea.

The ICJ's binding ruling demarcated a new maritime boundary midway between the two countries' rival claims.

It means both countries will have equal access to the fish-rich waters and to oil and gas exploration in the area.

The decision by the UN's highest court, which both countries have agreed to abide by, ends an eight-year dispute over the line of the maritime boundary.

Tensions over the issue had at times flared with both countries seizing one another's fishing vessels.

King of Spain

The argument had surfaced in 1999 shortly after Honduras ratified a treaty with Colombia, which has itself been in dispute with Nicaragua over the sovereignty of several small islands in the Caribbean.

The two nations are keen to put past differences behind them

The Nicaraguans argued that this treaty infringed their territorial waters.

The Honduran government argued that the maritime boundary had been set by the king of Spain in 1906, with Honduran territory beginning at the 15th parallel.

Nicaragua argued that the maritime border followed the line of its coast to the north-east as far as the 17th parallel.

They asked the ICJ to set a valid maritime border between Nicaragua and Honduras.

As well as resolving the issue of the borderline, the ICJ's ruling granted Honduras sovereignty over four small Caribbean islands.

Nicaraguan President Daniel Ortega and his Honduran counterpart, Manuel Zelaya, were to meet in the border town of Las Manos to show their mutual acceptance of the ICJ ruling.