A Swedish dairy has agreed to pay 266,000 dollar to a 77-year-old Greek after placing his picture on pots of Turkish-style yoghurt.

• Greek sues dairy over 'Turkish' yoghurt photo

A Greek man has received more than 160,000 euros (200,000 dollars) in compensation after a Swedish dairy used his picture on a Turkish-recipe yoghurt pot, the dairy said Wednesday.

Athens and Ankara have been divided by long-standing hostilities and Greek man Minas Karatzoglis took legal action after discovering his photo had been used without his consent as the face of a popular Turkish-style yoghurt brand.

"We reached an agreement and everything has been signed by all parties. We can use his picture on all of our products, including on the Turkish yoghurt," the purchase manager for the Lindahl dairy, Tomas Axelsson, told AFP.

"The transaction is between 1.5 million kronor and 2.0 million kronor (160,000 euros and 202,200 dollars, and 212,000 euros and 269,600 dollars), lawyer fees included," he said.

With a long greying moustache and red hat, 77-year-old Karatzoglis's photo features on pots of Lindahl Turkish-style yoghurt, a popular product in Sweden that is available in most supermarkets.

A Greek friend living in Stockholm alerted him to the fact that his image was on the offending containers earlier this year.

The unwilling model immediately demanded some five million euros in compensation, on the grounds that he lives in Greece and has no links to Turkey.

Karatzoglis's lawyer, Vassilis Dimitriou, told Greece's private Flash Radio that his client had reached an "preliminary agreement" with the Swedish company, as he was willing to avoid a court case in return for a "reasonable" sum.

He also said his client's picture in traditional Greek garb had been taken in the Greek town of Delphi during a fair years ago.

"That day he also bore the weapons of his great-grandfather who had actually fought against the Turks," Dimitriou said. "Somebody took his picture and sold it to an image database."

Karatzoglis' characteristic moustache, the lawyer added, had taken him 20 years to grow.

The dairy, which is based in Jönköping, central Sweden, said the claim came as a shock and that it had bought the photograph in good faith from an image library.