Yahoo is facing a legal challenge after it handed over the name of one of its customers to the Chinese authorities.

Wang Xiaoning is currently serving a 10-year sentence in a Chinese forced labour prison for posting pro-democracy articles on the internet and calling for multiparty democracy in his country.

Yahoo Hong Kong handed over his account details when asked by the Chinese authorities, enabling him to be arrested.

"In or around the Spring of 2002 Yahoo Inc signed an official voluntary agreement that had the effect of directly involving Yahoo in the censoring and monitoring of online content and communication by its Chinese users," the suit, filed by Wang's wife Yu Ling, states.

"By signing, Yahoo Inc voluntarily agreed to help monitor and censor electronic communication use involving information that, according to the Internet Society of China, could 'jeopardize state security' or 'disrupt social stability', and to report any offending online expression or communication to the People's Republic of China authorities."

The suit, filed under the Alien Tort Claims Act and the Torture Victims Protection Act, is the first to bring Western companies to account for handing over the names of customers to the Chinese police.

"Establishing the civil liability of torturers and other human rights abusers in US courts is an important method to prevent impunity and promote accountability because it is a remedy that can be invoked directly by survivors without the need for action by governments, as is the case with invoke criminal sanctions, and because it provides a way for abuses to be documented and confirmed in a court of law," said the World Organisation for Human Rights, which helped Yu Ling file the case in the US.

Human rights organisations have been sharply critical of the way Yahoo, Microsoft and Google have cooperated with the Chinese authorities either by censoring the information they provide or handing over user details to the authorities.

Google founder Sergey Brin has said he regretted the decision to do so, but will carry on anyway.