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As part of the deal, Coutts will be blocked from joining a rival syndicate.

'Russell Coutts shall not sail for another team in the 32nd America's Cup,' said an Alinghi statement.

'Ernesto Bertarelli and Russell Coutts both expressed their deep satisfaction with this positive outcome.

'Both parties have agreed to make no further comments.'

An Olympic gold medallist at Los Angeles in 1984, Coutts steered New Zealand's Black Magic to victory in the America's Cup in San Diego in 1995. He then orchestrated the Cup's defence in Auckland in 2000 before defecting to Alinghi, financed by Bertarelli, a Swiss bio-technology billionaire.

Two years later, Alinghi whitewashed Team New Zealand 5-0 to become the first challengers in history to win the America's Cup at their first attempt. It was Europe's first success in the event's 152-year history.

The 2007 America's Cup will take place in Valencia, Spain.