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By Jon Herskovitz

JOHANNESBURG (Reuters) - South African President Jacob Zuma intends to drop a four-year-old lawsuit claiming nearly $600,000 in damages from a cartoonist who depicted him poised to rape "Lady Justice", his office said on Sunday.

The Sunday Times, named as a defendant in the case, also said it had reached agreement with Zuma's lawyers for the suit and all claims to be ended.

"The president ... would like to avoid setting a legal precedent that may have the effect of limiting the public exercise of free speech, with the unforeseen consequences this may have on our media, public commentators and citizens," his office said in a statement.

It added that it still saw the cartoon as an affront to the dignity of the president.

The civil case had been due to start on Monday. Under the settlement, Zuma will pay part of the legal costs of the defendants, his office said.

Zuma, facing re-election for leader of the ruling African National Congress (ANC) at the end of the year, has been criticized for pushing laws seen as trying to muzzle the media.

If the case went forward, it could have provided ammunition for foes in the party who say he wants to silence his critics through bullying.

Zuma had been seeking 4 million rand ($462,300) for defamation from Avusa media and an additional 1 million rand from a former Sunday Times editor for publishing the 2008 cartoon.

Ray Hartley, the current editor, said in the paper: "A lot of time and taxpayer money has been wasted on an ill-considered effort to curtail free expression."

The cartoon from award-winning Jonathan Shapiro, better known by his pen name "Zapiro", shows Zuma's supporters holding down Lady Justice while Zuma stands over the woman with his trousers unzipped.

It was published when Zuma was facing corruption charges that could have blocked his path to the presidency.

A court in 2006 acquitted Zuma of raping an HIV-positive family friend in a case that garnered widespread public interest in a country with one of the world's highest recorded rates of sexual violence.

Zuma's ANC took a Johannesburg gallery to court and led massive street rallies earlier this year to protest a painting called "The Spear" that portrayed Zuma with his penis exposed.

The ANC, which has ruled since apartheid ended in 1994, called the image racist and intended to tarnish Zuma's dignity.

Zuma's critics say the image was reflective of his colorful personal life. A Zulu polygamist with four wives and more than 20 children, he has also been caught having extra-marital affairs.

(Reporting by Jon Herskovitz; editing by Andrew Roche)

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