By Valentina Za

MILAN (Reuters) - Italian dairy group Parmalat (PLT.MI: Quote, Profile, Research) will pay out stock worth about 24 million euros ($37.1 million) to settle a U.S. class-action lawsuit stemming from its collapse in Europe's biggest bankruptcy, the company said on Friday.

The payment of 10.5 million shares will settle litigation against the company in U.S. District Court in New York, Parmalat said. Its stock was up 2 percent at 2.24 euros at 1244 GMT.

Parmalat, Italy's biggest listed food company, will also pay up to 1 million euros of the cost for notifying class members of the settlement, it said in a statement.

"This removes the issue of the class-action suit, which has probably weighed on the stock over time, in return for a nominal payment," a company spokesman said.

The shares to be issued are part of a pool set aside to satisfy late claims, he added. The settlement, which still requires court approval, was worth about 24 million euros based at Friday's share price.

In a research report, Santander analyst Andrea Paladini said the amount to be paid was "significantly lower than expected."

Italian consumer association Aduc said the "new Parmalat had got away with (paying) relatively little money." In a statement, it said investors' losses were estimated at $8 billion.

Parmalat collapsed in December 2003 under about 14 billion euros of debt, wiping out the savings of thousands of small investors. The company was restructured and relisted on the Milan bourse in 2005.