Hallyday is one of France's biggest stars

The appeal court overturned an earlier decision that ordered Universal to hand back the valuable original recordings.

Hallyday, 62, had accused the label of exploiting him.

He will be bound to Universal until the end of 2005, producing one more album but will not be able to produce another album for any other label until 2007.

This is to ensure Universal has enough time to promote the album before Hallyday releases another one.

There was originally an agreement to record six albums with Universal until relations broke down.

Concert return

French icon Hallyday's back catalogue, dating back to 1961, continues to sell well in France, where he is considered one of the country's greatest singing legends.

Under the new agreement, Hallyday will be able to record new versions of his past hits with a different label.

He is planning a concert tour in 2006 to mark his 63rd birthday having taken a three-year break from performing live.

The most recent court ruling states these concerts can be recorded and marketed by another record label from 2007, but a fee would have to paid to Universal.

Universal appealed against returning the master recordings, arguing that to give Hallyday the rights to the tapes would set a "dangerous" precedent in the music industry.