Actor Tom Cruise has dropped a US$100 million defamation lawsuit against a magazine publisher after the publisher stated he does not have a videotape showing the actor having sex with another man, according to Associated Press.

Michael Davis of Bold magazine has retracted his claim and now says he has never seen a video of Cruise having gay sex and does not know of the existence of such a video.

The lawsuit which was filed in June, accused Davis of sending news releases to at least a dozen US media organisations alleging Cruise engaged in a homosexual relationship during his marriage to Nicole Kidman.

Bertram Fields, Cruise's attorney said his client was pleased at the outcome of the case: "Essentially, what Tom was after was the very finding that the court made… The story was false. He's not gay, and the judge so ruled.''

"The plaintiff is not, and never has been, homosexual and has never had a homosexual affair," a Los Angeles judge wrote in the court documents.

After the settlement, Fields emphasised once again that: "Tom is a great respecter of homosexual rights, but he's not gay.

Cruise is said to be in a new relationship with Spanish actress Penelope Cruz, whom he met and fell in love with during production of his film Vanilla Sky.