The Swiss food multinational, Nestlé, says it has joined the $1.25 billion (SFr2 billion) restitution settlement between Swiss banks and claimants of dormant accounts from the Holocaust era.

On Monday, Nestlé said it would be contributing SFr25 million to the settlement. The company said its inclusion in the agreement would free it from the threat of future litigation from Holocaust era claimants.

The announcement comes just days after a deadline expired for Swiss companies to take part in the settlement. Firms that used slave labour during the Second World War were given until last Friday to join the settlement in exchange for protection from any future legal action.

Nestlé has not admitted that it used slave labour but said it was taking part in the settlement because it felt morally obliged to do so. It said some companies, which it acquired after the war, had been guilty of the practice.

"As the legal successor of such corporations, Nestlé... accepts its moral responsibility to help alleviate human suffering... since this injustice was committed in the company's domain."

Nestlé has already said it Maggi unit used forced labour in the German border town of Singen.

It added that its German and Austrian subsidiaries would be taking part in separate settlements agreed by those countries.

The 1998 settlement between Swiss banking giants, UBS and Credit Suisse, and Jewish groups was formally approved last month by US district court judge, Edward Korman, paving the way for a distribution plan to be drawn up by September 11.

Billed as an all-Switzerland accord, it covers liabilities against the two big banks as well as the Swiss National Bank, other smaller Swiss banks, some tiers of government and Swiss companies over their subsidiaries' use of slave or forced labour in Nazi Germany.

The accord also covers claims against Swiss insurers for failing to honour life insurance policies. Swiss insurance companies, Baloise, Swiss Re, Swiss Life and Helvetia Patria, recently contributed a further $50 million to cover claims against them.

It is estimated that 100 Swiss firms used between 2,000 and 5,000 forced labourers in Nazi-controlled plants, mainly in small southern German towns close to the Swiss border.

Payments to claimants are not expected to start until the end of the year. Former slave labourers, war refugees turned away from Swiss borders, Gypsies, homosexuals and Jehovah's Witnesses could also benefit.

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