UPDATE 1-Michael Jackson auction canceled, exhibit continues

* Michael Jackson auction canceled

* Beverly Hills exhibit to continue through April 25

* Auctioneer had expected sale to raise $10 million (Updates with auction canceled)

By Jill Serjeant

BEVERLY HILLS, April 14 (Reuters) - A huge auction of Michael Jackson memorabilia scheduled for next week was canceled on Tuesday and auctioneers agreed to return all the items to the singer.

Auctioneer Darren Julien told Reuters the cancellation of the planned April 22-25 sale was the result of an agreement with Jackson, who had filed a lawsuit in March demanding the return of certain items.

A public exhibit of the 1,400 lots which opened on Tuesday in Beverly Hills will continue until April 25.

"The auction isn't going to take place. We wanted to reach an agreement (with Jackson) and we have reached one today that is mutually acceptable and beneficial," Julien said.

Julien said all the items -- including a single crystal white glove worn in the singer's "Billie Jean" performances and the gates to his Neverland Ranch in California -- would be returned to Jackson when the exhibit closes.