It had been alleged the bank dumped hundreds of millions of dollars of toxic mortgage assets on to unsuspecting investors, the Independent on Sunday reports.

But the New York Supreme Court had now approved the dismissal of a lawsuit from the French fund manager Oddo Asset Management, which said Barclays had used off-balance-sheet vehicles as a “dumping ground” for mortgage assets the bank knew were about to plunge in value.

The attorney for Oddo, Geoffrey Jarvis, said the company would consider an application to appeal, according to the Independent on Sunday.

The case involving Barclays was one of hundreds working its way through the US legal system.