US antitrust enforcers are investigating Google’s settlement with publishers over its book-scanning project, but the internet firm has defended its position.

Google reached an agreement in October to create a $125 million fund to pay authors to have their work scanned and made available online.

The US Justice Department became involved after representatives for Consumer Watchdog and the American Antitrust Institute raised concerns earlier this month, according to Bloomberg News.

Consumer Watchdog said the deal sets up an unfair monopolistic situation for Google by allowing it to dominate the digital market.

The deal still needs court approval and the deadline has now been extended to September for others to oppose it, a BBC report said.

Google has defended its position by highlighting the benefits to readers of putting millions of books online.

These include being able to access out-of-print books, or so-called "orphaned" books where the author cannot be found, as well as being able to get hold of more books in foreign languages, said a blog posting by Adam Smith, the director of product management for Google Book Search.

Smith said there were also benefits for authors because they will be able to let users preview and purchase their in-print books through Google Book Search.

"Readers will have even more options for accessing in-print books than they have today," he said.

The deal only applies in the US, but Google believes it will provide a valuable test bed for developing similar services around the world, said Smith.