A deputy head teacher who clashed with school governors has been given an out-of-court settlement of £200,000.
Diane Bradford accepted the payout before her personal injury claim was due to be heard at the High Court.
She was deputy head of Our Lady of Assumption RC Primary in Tile Hill, Coventry until August 1999.
She and the head teacher were suspended in a row with the governors then reinstated - but neither returned to work due to stress.
Mrs Bradford's union, the NASUWT, said it believed this might be the first time a governing body had been sued for "bullying".
The governors involved resigned in 2000 following an investigation by the local education authority, Coventry City.
The school's governing body was sued as the employer. The payment will be met by its insurers.
The head, Noel Maher, also settled out of court earlier this year for, it is understood, £100,000.
Diane Bradford said on Wednesday: "This experience has knocked my confidence and self-esteem to the point that even after this incident, I felt unable to return to teaching despite taking jobs in two different schools.
"I feel like I've lost an awful lot because from being a teenager I wanted to be a teacher. It took me a long time to make the decision that I didn't want to go back.
"Now I have to look to the future and be positive."
Her union said the payout was large but took into account her loss of earnings and pension - as she is only 48.
A report from the Teacher Support Network helpline recently said conflict with colleagues, especially managers, was a major cause of school stress.
At the NASUWT's annual conference last month, delegates said they viewed the rise in workplace bullying with alarm and called for a high-profile campaign to highlight the issue.
They wanted to expose the lengths to which some governing bodies, education authorities and church leaders would go "to cover up these practices".
The general secretary, Eamonn O'Kane, said he was pleased Mrs Bradford had received some recompense for the trauma she endured.
"She was right not to suffer in silence and to come to her union for support," he said.
"However, NASUWT prefers prevention to compensation. Every effort must be made to prevent those in authority from abusing those who work for them.
"Employers must take complaints of bullying seriously from the outset in order to prevent the loss of valuable teachers to the profession."
No-one from the school was available for comment.
In a joint statement, the Birmingham Catholic arch-diocese and Coventry education authority said it would be inappropriate for either of them to comment in detail.
"However, we welcome the conclusion of the case and wish Mrs Bradford every happiness for the future."
The diocesan director of schools, Fr Marcus Stock, dismissed reports that one of the issues had been that the parish priest at the time, a member of the school's governing body, had wanted children to attend funerals.
He said it was not unusual, when a school was next to a church, for children who served at mass on Sundays also to be involved in funeral services.