Google's deal to digitize millions of books opens the way for others to enter the online book business, the company's chief legal officer said in testimony prepared for a congressional hearing on Thursday.

David Drummond, addressing critics of the project, said Google was fully compliant with copyright law, and access to online books could revolutionize research in schools without major libraries.

The scanning project prompted a 2005 lawsuit filed by the Authors Guild, accusing Google of copyright infringement. A proposed settlement to resolve the lawsuit will be discussed on October 7 in Manhattan federal court.

As part of the settlement, Google has agreed to pay $125 million to create a Book Rights Registry, where authors and publishers can register works and receive compensation.

Rival companies, privacy advocates and some libraries, have accused Google of violating antitrust law to dominate the digital book market. The Justice Department is looking into their concerns.

Google's Drummond argued that the scanning of orphan works -- books whose authors cannot be found -- would make it easier for other companies to follow suit.

We believe anyone who wants to re-use abandoned works should have a fair, legal way to do so. In our view, the settlement helps, said Drummond the testimony prepared for a U.S. House of Representatives Judiciary Committee hearing.

So far, the search engine giant has scanned 10 million books, including many obtained from libraries.

Some Google competitors, libraries and others said they support plans to digitize books but not the settlement.

The Open Book Alliance said the pact threatened to monopolize the access, distribution and pricing, of the largest, private digital database of books in the world.

It would do so by using the class action mechanism to not only redress past harm, but to prospectively shape the future of digital book distribution, said the alliance in a letter to Representatives John Conyers and Lamar Smith. Conyers heads the Judiciary Committee, while Smith is the ranking Republican.

Signatories of the letter included Microsoft, Yahoo and Inc, the New York Library Association, and small publishers like Bear Star Press. Privacy advocates like Consumer Watchdog also oppose the settlement.

The case is Authors Guild et al v Google Inc 05-08136 in U.S. District Court for the Southern District of New York (Manhattan)

(Reporting by Diane Bartz; Editing by Tim Dobbyn)