Combs said he changed his name last year to "simplify things" |
The rapper, also known as Puff Daddy and Puffy, agreed to pay more than £110,000 to settle out of court with Richard "Diddy" Dearlove.
Dearlove, best known for his dance remix of the Blondie hit Atomic, had used the name since 1992.
"I'm really happy and relieved," Dearlove told the Guardian newspaper.
Settlement agreement
Combs changed his name from Puff Daddy to P Diddy in 2001, but he then dropped the "P" from his name when he appeared on Nasty Girl, a posthumous release by fellow rapper Notorious BIG which reached Number One in the UK in August last year.
However, he can no longer trade under the Diddy name in the UK, under the terms of the settlement agreement signed with Dearlove.
Dearlove's only hit under the Diddy name was a Number 23 hit, Give Me Love, in 1997.
Had the case not been settled, it would have gone before the Royal Courts of Justice in London on 23 October.