£125,000 for Rachel Nickell officer

Rachel Nickell: Stabbed to death in front of her son

An undercover policewoman who befriended the main suspect in the Rachel Nickell murder case has been paid £125,000 as compensation for stress.

The 33-year-old undercover officer befriended Colin Stagg after he was identified as a suspect in the 1992 killing.

But the evidence, collected by the officer known only as Lizzie James, was thrown out of court by a judge who said police had engaged in "deceptive conduct".

The award has created controversy as Miss Nickell's son, Alex, who witnessed his mother's murder when he was only two, received £22,000 in compensation.

'Disgusting' payout

Lyn Costello, co-founder of Mothers Against Murder and Aggression, described the payout as "disgusting".

"The taxpayer is paying this money out and as a taxpayer I know where I'd rather have my money going to, and that is to a victim of crime rather than someone doing their job," she added.

Miss Nickell, 23, was stabbed to death on London's Wimbledon Common. She suffered 49 knife wounds.

Colin Stagg: Acquitted of murder

No one has ever been convicted of her murder. Mr Stagg was acquitted of the murder in 1994.

After the failed trial, Lizzie James took 18 months sick leave suffering from post-traumatic stress disorder and eventually retired early from the force in June 1998.

The Metropolitan Police has now agreed an out-of-court settlement ahead of a High Court trial scheduled for this month.

A Met spokeswoman said: "The Metropolitan Police Service has not admitted liability."

'Exceptional officer'

She added the Met would be paying the officer's costs, though an amount had still to be agreed by the court.

The officer's solicitor Liz Dux said it was a "satisfactory and amicable resolution".

She said Lizzie James had been an "exceptional officer, professional, courageous and with a glowing career in front of her".

She said the willingness of the Metropolitan Police to pay substantial damages "must indicate their recognition that she sustained serious psychiatric injury".

Ms Dux said her client now wanted to put the ordeal behind her and rebuild her life.

The officer was backed by the Police Federation when she began the legal action two years ago.

A spokeswoman said: "Her career and health have been wrecked as a consequence of a police operation where she was a junior officer simply obeying the orders of her superiors."