A New York court has rejected a class-action settlement hammered out between Google Inc and publishers that would allow the Web search leader to scan millions of books and sell them online.

ShareUnder terms of the proposed settlement of a 2005 lawsuit brought by the Authors Guild and Association of American Publishers, Google would create a registry of books and pay $125 million to people whose copyrighted books have been scanned and to locate the authors of scanned books who have not come forward.

But Judge Denny Chin said the agreement "would simply go too far" and would give Google a significant advantage over its competitors.