Burma’s ministry of mining has agreed to drop its controversial defamation lawsuit against the Voice Weekly news journal, which was launched after they printed corruption allegations against the agency in March last year.

The news comes less than two days after Burma’s interim press council agreed to mediate with the government in a bid to resolve the dispute.

The Voice Weekly was sued after quoting a report from the auditor general’s office that found that several ministries, including the mining ministry, misappropriated billions of kyat in public funds. The editor faced up to two years in jail and an undisclosed fine.

The journal’s lawyer told DVB that the mining ministry is set to formally drop the case at a court hearing on 17 January. It follows several rounds of negotiations between the parties.

“Ko Kyaw Min Swe [the editor] and U Kyaw Than went to Naypyidaw [this week] and when they came back they said everything was [settled],” said Win Shwe.

Earlier this week Burma’s interim press council pledged to step in to resolve the case, which has dented the country’s reform progress.

“We have consistently urged [the government] to reconsider the case and to negotiate [with the journal],” Zaw Thet Htwe from the council told DVB.

“We are hopeful that the government in Rangoon Division will also drop their case against Snapshot News journal’s editor Ko Myat Khine, so that we will be able to build trust between the government and the fourth estate.”

Snapshot News journal is being sued for publishing a picture of the corpse of the young woman, whose rape and murder in May last year sparked a wave of sectarian violence in western Burma.

The interim press council, which is mandated to promote media freedom in the former pariah state, was formed shortly after the government abolished pre-censorship last year. The reformist regime, led by President Thein Sein, has pledged to shed further draconian legislation in the coming year.