Former MP Harvey Proctor will receive a £900,000 payout from Scotland Yard, which he said he hopes will deter police from “assuming the guilt of innocent suspects”.
The ex-Conservative politician was one of several high profile men falsely accused by notorious fantasist Carl Beech of being involved in a murderous VIP paedophile ring.
Beech, then known as “Nick”, falsely claimed that he and other boys were raped and tortured in the 1970s and 1980s.
The investigation into the fantasy claims, Operation Midland, began in 2014 and saw dawn raids on the homes of 72-year-old Mr Proctor, the late D-day veteran Lord Bramall, and Lord Brittan.
Mr Proctor has accepted the settlement, saying “I shall now seek to repair my damaged life in the years that are left to me.”
Beech has been jailed for 18 years
He will receive £500,000 in compensation from the Metropolitan Police and the force will also be required to pay £400,000 in legal costs.
It is believed to be the largest ever payment for negligent behaviour made by a British police force, other than in cases where the victim has been imprisoned.
But Mr Proctor also accused the Met’s Police Commissioner Cressida Dick of “failing abjectly in her duty” and called on her to resign.
He said in a statement: “I hope the size of this award will deter police from assuming the guilt of innocent suspects and from misleading judges in order to obtain search warrants."
Operation Midland was heavily criticised in an independent review by former High Court judge Sir Richard Henriques earlier this year.
He condemned the force for believing Beech for too long, applying for search warrants with flawed information and for failing to close the investigation sooner.
Beech is now serving an 18-year prison sentence for 12 counts of perverting the course of justice and one count of fraud.
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