A British student who created a website that let people watch films and television shows for free has struck a deal with the United States to avoid extradition, London's High Court heard on Wednesday.

Richard O'Dwyer, a 24-year-old student at Sheffield Hallam University in northern England, allegedly earned thousands of pounds through his TVShack website before US authorities closed it down over copyright infringement claims.

He could have faced jail in the US. But his lawyer Edward Fitzgerald told the court that the student had signed a draft deal that will see him travel to the US and pay compensation, but avoid a trial and criminal record if found guilty.

O'Dwyer was arrested in London in 2010 and admitted to police that he earned about �15,000 ($24,000, 18,600 euros) a month from advertising on the TVShack site.

Judge John Thomas described the outcome as "very satisfactory".

"It would be very nice for everyone if this was resolved happily before Christmas," he added.

Interior minister Theresa May had approved O'Dwyer's extradition after a court ruling in January and the student had appealed against the decision.

He would have been the first British citizen to be extradited to the US for an alleged copyright offence of this kind. His lawyers had argued he would have become a "guinea pig" for US copyright law.