Google may face legal action after admitting to unauthorised use of data from Chinese internet portal Sohu in its own Chinese translation software.

The search giant apologised to Sohu earlier this week, after Sohu technicians found that Google's new Chinese Pinyin Input Method Editor (IME) had copied elements of Sohu's Sogou Pinyin IME.

Google has now posted an updated version of the software on its Google Labs website.

"The new dictionary is now based on tens of thousands of entries which Google's enormous search database has accumulated over the years," said Google China spokesperson Cui Jin.

However Sohu has not yet withdrawn its demand for compensation from Google.

Both products draw on a database of popular search queries from Sohu's Sogou search engine, enabling users to type Chinese characters by entering their Western equivalents.

Google said that its IME product had been built "leveraging some non-Google database resources" during initial development, but that the issues were now resolved by the upgrade.

Cui Jin admitted in an email statement that Google is "willing to face this issue of ours".