The publisher of the Daily Mail has agreed to pay £125,000 in libel damages to a TV psychic after it wrongly accused her of using a hidden earpiece to "scam" a theatre audience in Dublin.
Associated Newspapers has apologised to Sally Morgan and also agreed to pay her legal costs.
The case was concluded at a hearing at the High Court in London during which the Daily Mail withdrew its allegation that Mrs Morgan, known as "Psychic Sally", cheated her audience at a show in September 2011.
The article claimed Mrs Morgan, who claims on her website to "see and hear dead people", used a hidden earpiece in order to receive instructions, relaying them back to her audience as if they were messages from the spiritual world.
The claim originated from a phone-in programme on Irish radio when two women who went to the Dublin show claimed to have heard crew members saying something which Mrs Morgan then repeated on stage.
It emerged that the crew members were in fact theatre staff and not part of the psychic's team.
The allegation caused "enormous distress" to Mrs Morgan, her lawyer said and the psychic sued for libel after the article was published.
In a statement on her website, Mrs Morgan revealed the damages compensation had been £125,000.
"There will always be sceptics who attack my work and I understand and accept that," she said.
"However, to libel me and falsely accuse me of a con trick does not constitute rational commentary or debate. I hope now this settlement and apology will repair the damage that has been done.
Lawyers said it was one of the most substantial libel payments in recent memory.
Last October, the comedian Frankie Boyle received £54,650 in libel damages after a Daily Mirror article described him as "racist".
Lawyers said the article, which began with the words "Racist comedian Frankie Boyle" was defamatory and unjust.
Contact our media, libel and privacy solicitors on 0800 916 9081 or email firstname.lastname@example.org if you would like advice on any media, libel and privacy matter
Posted by Chris Stevenson