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The Presidency says President Jacob Zuma withdrew his claim for damages against cartoonist "Zapiro" to avoid setting a legal precedent.
Spokesman Mac Maharaj said in a statement on Sunday that the President wants to avoid setting a legal precedent that may have the effect of limiting the public exercise of free speech.
He said Zuma had decided to withdraw his claim, made in December 2008, against Jonathan Shapiro and Avusa Media, the publishers of The Sunday Times, and the newspaper's editor at the time Mondli Makhanya.
He had also decided to make a contribution to their costs.
Zuma had sought R5m in damages for defamation and impairment of his personal dignity over the publication of Zapiro's Lady Justice rape cartoon in September 2008.