The US city of Atlanta has agreed to pay $1 million to a gay bar raided by police last year.

The Atlanta Eagle was raided in September 2009 and patrons said the dozens of officers subjected them to excessive force and homophobic abuse.

Police claimed that the bar was raided because of anonymous reports of drug use and and men having sex.

Three staff were arrested for dancing naked without permits but they were found not guilty after a court ruled there was no evidence that they had broken licensing laws.

During the raid, people were made to lie on the floor for up to two hours while witnesses reported hearing police make comments such as “This is a lot more fun than raiding niggers with crack” and “I hate gay people”.

There were complaints that patrons had been shoved or kicked to the floor.

No evidence of illegal sex or drug use was found and no search warrant was issued to enter the building.

Nineteen patrons filed a lawsuit against the Atlanta Police Department last November seeking damages and alleging that some officers committed crimes of false imprisonment, assault, battery and trespassing.

Atlanta city council voted 14-0 yesterday to pay the money to the Atlanta Eagle. A judge must approve the settlement.