A Christian-owned banquet hall has fought off legal action by a straight couple over its policy on same-sex weddings.

The lawsuit was filed against Inne of the Abingtons in Pennsylvania after it refused to host the wedding of a lesbian couple.

The refusal prompted a heterosexual couple to cancel their booking for a 100-guest wedding and reception at the venue.

The heterosexual couple demanded the return of their deposit, which was non-refundable, and triple the value in damages.

The inn was defended by Liberty Counsel and the couple withdrew their lawsuit before the judge could enter a formal dismissal.

"We are happy to host dinners, birthday parties, or just about any other kind of event regardless of a client's sexual orientation, but not a same-sex wedding," said John Antolick, the owner of the inn.

He added, "I don't want to discriminate against anyone, but my conscience will not allow me to use my business to endorse an event that contradicts God's design for marriage."

Roger Gannam, senior litigation counsel at Liberty, said the outcome was a "victory for religious liberty".

"A Christian business owner should not have his contracts dishonored or be hauled into court because he operates his business according to conscience," he said.

Traditional positions on marriage have become a tricky issue for wedding venues in the US. Earlier this year, the Christian owners of a farm venue in upstate New York said they would stop hosting wedding ceremonies altogether after a lawsuit was filed against them by a gay couple.

Jennifer McCarthy and Melisa Erwin won their case against Liberty Ridge owners Cynthia and Robert Gifford, who were ordered to pay a $10,000 fine, and $1,500 each to McCarthy and Erwin. They were also ordered to train their employees in "the state's view of marriage".

Although Liberty Ridge will no longer host weddings, it will continue to accommodate wedding receptions for both heterosexual and same-sex couples.