A Paris court today acquitted the editor of a satirical French weekly sued by two Muslim groups for publishing cartoons of the Prophet Muhammad, in a case seen as a test for freedom of expression.

Applause broke out in the courtroom at the announcement of the verdict, which ruled that three cartoons published by the weekly Charlie Hebdo in February 2006 were not insulting to Muslims.

The Paris Grand Mosque and the Union of Islamic Organisations of France took Philippe Val, the Charlie Hebdo editor, to court for reprinting cartoons that first appeared in a Danish newspaper, sparking angry protests by Muslims worldwide.

They argued that the images drew an offensive link between Islam and terrorism and asked for 30,000 euros (£20,000) in damages.

Mr Val welcomed the ruling and said it would open a much-needed debate among Muslims in France.“If you believe as we do that Islam is perfectly compatible with French democracy, such a debate is a blessing,” he said.

The court ruled that two of the cartoons were absolutely not offensive to Muslims. One, reprinted from Denmark’s Jyllands-Posten, showed the prophet standing on a cloud, turning away suicide bombers from paradise with the caption 'Stop, stop, we ran out of virgins'.

The second, by the French cartoonist Cabu, showed Muhammad sobbing, holding his head in his hands and saying:“It is hard to be loved by fools”, under the caption 'Muhammad overwhelmed by fundamentalists".

On the third cartoon - showing Muhammad wearing a turban shaped as a bomb, and first printed in Jyllands-Posten - the court’s ruling was more nuanced.

The court decided that the caricature could potentially be insulting to Muslims but that the context of its publication in Charlie Hebdo made clear there was no intention to offend.

The president of the Union of Islamic Organisations of France, Lhaj Thami Breze, said following the hearing that he intended to appeal “because we are unhappy with the verdict".

But Christophe Bigot, a lawyer for the Paris Mosque, said that his client would not challenge the court's decision. He said it was a "balanced verdict that respects both the right to caricature and the possibility for a group of people to complain”, adding: “This acquittal only refers to Charlie Hebdo, since the court considered that it intended only to make people laugh, not to cause offence."

The trial was seen as an important test for freedom of expression in France and large crowds crammed into the Paris courtroom during hearings last month to hear the arguments put by both sides.

Candidates in next month’s French presidential election also lined up during the trial to defend their ideas about religion and freedom of expression, while a group of 50 intellectuals including many French Muslims published an open letter urging support for Charlie Hebdo.

The editors of Jyllands-Posten were acquitted in October of any wrongdoing in a separate case in a Danish court and very few of the dozens of newspapers worldwide that reprinted the cartoons have faced legal action.

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