Italian fashion house Versace has dropped the threat of legal action against a bus company which used a design based on a dress worn by actress and model Liz Hurley to decorate its vehicles.

Scottish bus operator Lothian Buses painted its fleet with the distinctive mosaic of pink and gold diamonds after its chief executive, Neil Renilson, saw Hurley in the eye-catching dress at a film premiere.

Mr Renilson chose the design to replace the company's traditional maroon and white colours.

But when Versace warned the bus firm it could take legal action, Mr Renilson refused to drop the design, even after lawyers warned him the Milan-based fashion house had a strong case.

After months of legal wrangling, a spokesman for Versace confirmed that it will not puruse legal action.

Mr Renilson told The Scotsman newspaper: "They realised that if they made anything of this they would end up with a lot of stories about their designs only being fit for the backs of buses."

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