A deficit of £176,000 that Equity predicted it was facing after supporting three of its members in a defamation hearing has been reduced to £3,954.

The union credited the reduction on “better than expected subscription income and staff pension figures”.

However, the deficit still marks the first time the union’s income and expenditure account, which tracks what it earns and spends, has been in the red since 2005.

Union spokesman Martin Brown said: “We are absolutely delighted that Equity has a very modest deficit, not withstanding the enormous amount of money we have had to pay out on the defamation case.”

The legal case Equity supported relates to three union members, who are part of a group called The Gillettes and who claimed they had been defamed by a former booking agent.

Last year, the High Court ruled that the members had been defamed but were only entitled to nominal damages and would have to pay 75% of the defendant’s costs after one of the Equity members lied during his evidence.

This led Equity to warn in January this year that it was facing an operating deficit of £176,000 because of the “adverse costs judgement”.

The union has claimed total costs for the case could be in the region of £500,000. Some of this has already been paid, and therefore included in 2012’s accounts, but some is expected to be paid out of 2013’s accounts.

Since 2005, the union has worked to avoid a deficit, with 2011’s operating surpluses put at £677,504.