The real difficulties encountered by Yahoo do not constitute insurmountable obstacles

from Judge Gomez's original ruling

But a lawyer for the California-based company said it would be up to US courts to enforce the ruling, which was "not likely" because of American free-speech laws.

Yahoo France does not carry the auctions but French internet users can access the company's US site at the click of a mouse.

Judge Jean-Jacques Gomez heard evidence from three court-appointed experts that a system of checking the nationality of users, combined with password checks could block 90% of French users trying to buy Nazi memorabilia.

Possible appeal

Yahoo lawyer Greg Wrenn said the ruling would have to be enforced by a US court because the company had no assets in France.

When you type in the word Nazi you find a lot of anti-Nazi material, such as Anne Frank's diary

Yahoo France managing director Philippe Guillanton

Mr Wrenn, associate general counsel international for Yahoo, said his office was still working on translating the French ruling and would consider an appeal if necessary.

Yahoo could either appeal to a higher French court or ask a US court to intervene on the grounds that a French court has no powers to impose sanctions on the US site of a US company.

'Dangerous precedent'

Yahoo France managing director Philippe Guillanton said the judge's ruling set a "very dangerous precedent".

He said it was the first time, to his knowledge, that an online content editor had been asked to impose national limits to material on the internet.

The Union of French Jewish Students (UEJF), one of two organisations which brought the original complaint against Yahoo in April, welcomed the decision.

The group's chairman, Ygal El Harrar, said Judge Gomez's verdict would help stop "the trivialisation of the memory of the Shoah," the name many Jews use for the Holocaust.

But Mr Guillanton said filters detecting keywords to block access to pages would also prevent people from accessing genuine World War II historical sites.

"For example, on Yahoo, when you type in the word Nazi you find a lot of anti-Nazi material, such as Anne Frank's diary," he said.

Expert advice

Judge Gomez set up a three-member expert panel to advise him following the company's appeal in July.

The panel said on 6 November that although there were technologies that could block internet users in a given location from accessing a particular site, those technologies were not foolproof.

Mr El Harrar said the ruling confirmed the UEJF position that Yahoo was technically capable of stopping French users from participating in auctions.

French law prohibits selling or exhibiting material with racist connotations.

Yahoo's French site does not offer Nazi items for auction.

However, Yahoo's US site had 1,982 Nazi-related items for auction, including Swastika armbands, flags, hats and military decorations, at the time of the ruling on Tuesday.

Yahoo shares fell sharply on the Nasdaq index of high-tech stocks following the court ruling.