Supermarket chain Morrisons is set to receive a substantial payout in its defamation case with the Office of Fair Trading (OFT), it has been revealed.
Morrisons initiated legal proceedings in February following an OFT press release dating from September last year in which the retailer was accused of fixing the price of butter and cheese.
The watchdog has agreed to pay the supermarket chain £100,000 plus legal costs and has issued an apology.
Legal expenses could total between £300,000 and £400,000, according to inside sources, although Morrisons declined to comment.
In its apology, the OFT said it "regrets that the press release contained these serious errors and wishes to apologise sincerely to Morrisons for their publication".
Established in 1973, the OFT is a consumer and competition authority which seeks to encourage firms to comply with competition law and improve their practices through self-regulation.