The New York Times' "Bits" blog is reporting that Facebook is about to settle a long-running lawsuit, ending an "embarrassing" legal episode for the social networking site.

According to a "person briefed on the status of dueling lawsuits between Facebook and the competing site ConnectU" Facebook is in the process of finalising a settlement.

The owner of Facebook, Mark Zuckerberg, had been facing the legal action over claims Zuckerberg stole the idea behind Facebook's billion dollar success story.

The action from ConnectU, brought by three former Harvard classmates of Zuckerberg claimed he stole their idea, business plan and coding while he worked on their social networking site.

Zuckerberg has always denied these claims but it seems has reached some kind of settlement with ConnectU, the terms of which have not been disclosed.

A Facebook spokesperson would not comment but the NYT's source said motions to dismiss the cases are expected to be filed "within weeks".