A Sunday newspaper is to pay damages to former home secretary David Blunkett over false claims he had an affair with an estate agent.
Mr Blunkett said he had been hurt by the allegations
The People has printed an apology for suggesting the MP might have made Sally Anderson pregnant, before abandoning her and lying about it.
Mr Blunkett's lawyer said the paper and Ms Anderson admitted the claims were false. "Substantial damages" were due.
Mr Blunkett said he was pleased to have his "honesty and dignity vindicated".
The story carried by the People on 16 October last year said Ms Anderson had "claimed that she had had sex with Mr Blunkett and that when she told him she might be pregnant he abandoned her".
The former work and pensions secretary said the impression developed as a result of the allegations had been "deeply damaging", as well as "hurtful and distressing".
"I have always been the first to admit I had made mistakes. But this article told the worst possible lies about my private life without any attempt to establish the truth," said Mr Blunkett.
"I also hope this will deter would-be fortune-seekers from making up lies and exploiting public figures for the sole purpose of making money."
The apology in the 12 March edition of the People reads: "On 16th October 2005 we published an interview with Sally Anderson headed 'Blunkett's lover loses baby'.
"Ms Anderson claimed that she had had sex with Mr Blunkett and that when she told him she might be pregnant he abandoned her.
"Ms Anderson also claimed that Mr Blunkett had used her for sex and had offered valuable gifts as an inducement.
"We now accept that these allegations are untrue and that Mr Blunkett did not lie about them.
"We apologise unreservedly to Mr Blunkett for any hurt and distress caused by the publication."
The paper has agreed to pay the MP damages and his legal costs.
Mr Blunkett has been forced to quit high-profile roles in Tony Blair's Cabinet on two occasions.
He stepped down as home secretary in 2004 over claims his office had fast-tracked a visa application for his lover's former nanny.
Following a return to the Cabinet as work and pensions secretary, he was forced to resign in November after breaking the ministerial code of conduct over paid work he took while out of the Cabinet.
Last week he revealed that he had now moved out of a grace-and-favour home in Belgravia provided for the use of ministers.
There was controversy after he remained in the property following his resignation.
In an interview for the GMTV Sunday Programme, he said: "I was there eight years and it did take a little time, because I couldn't oust somebody from their flat. I had to wait until they moved out.
"I'm very grateful to the prime minister for allowing me that breathing space and a civilised society allowing me to move out in a civilised fashion doesn't seem to me to be too much to ask."