WASHINGTON (AP) — Former White House aide Sidney Blumenthal dropped a $30 million libel suit against Internet gossip columnist Matt Drudge on Tuesday and agreed to pay Drudge's side $2,500 for travel costs.

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Blumenthal filed the suit in 1997 after Drudge reported a story that suggested Blumenthal beat his wife, Jacqueline. Drudge apologized and retracted the report almost immediately after it appeared on his Web site.

The lawsuit, filed in federal court, raised potentially groundbreaking issues about electronic journalism because Blumenthal and his wife also sued America Online, which carried Drudge's column.

AOL argued that it was not acting as a publisher because it simply reprinted the column rather than supervising or editing it. A judge later agreed, severing AOL from the case.