Randy Quaid has abandoned his $10 million legal action against the makers of Brokeback Mountain.

The actor – who said he had been underpaid – claimed the studio made a deal with him out of court, though they denied the agreement.

He had said that Universal Pictures subsidiary Focus Features had intentionally paid he and others less than was agreed. He played a homophobic rancher in the film.

A statement from Focus, however, said it knew nothing of a deal. It explained: "The circumstances of him dropping the suit are as mysterious as the circumstances under which he filed his claim."

Quaid's lawyer maintained that a "back-door" agreement had been made.