Tim and Gina Williams have received an undisclosed sum in compensation.
A couple who were wrongly accused of failing to protect their three children from sexual abuse have been given an undisclosed amount of compensation.
Tim and Gina Williams's son and two daughters were taken into care for two years after the abuse allegations.
The couple, from Newport, south Wales waived their right to anonymity after a judge "completely exonerated" them at the High Court in Cardiff in 2006.
Mr Williams said the couple had suffered a "total nightmare".
On Monday, they were back in court to settle their claim for compensation.
The couple were accompanied to the hearing to settle their claim against Newport City Council and Gwent Healthcare NHS Trust by their three children, who are now aged 14, 11 and seven.
The effect of what happened will continue to be felt for a long time
Robin Tolson, the family's Qc
The terms of their settlement cannot be disclosed except to say as part of the terms Mr and Mrs Williams received a letter of apology from the council.
Mr Williams, 39, said: "Since this all started four-and-a-half years ago, it's been a total nightmare.
"Now we've got closure and can get back on with our lives and start afresh."
Their children were put in three separate foster homes in August 2004 after Mr Williams found his five-year-old daughter with an 11-year-old boy on top of her. Both children were naked from the waist down.
The police were called and social services became involved.
Expert
The girl was medically examined by a doctor who said she had been chronically abused and that it could not have been by the boy, so the investigation turned to look for adult perpetrator.
A second opinion from another UK doctor agreed there had been sexual abuse, but did not agree that it was to the same extent.
But six days before a final court hearing, the notes were sent to another doctor in the US, an expert in child abuse, who said he did not think any abuse had taken place.
The girl was re-examined by the doctor who gave a second opinion who then agreed there had been no sexual abuse. The first doctor then accepted their opinions.
The council accepted that the Williams's daughter had never been abused and that none of the children should have been taken into care.
'Inadequate resources'
Giving his judgement, Judge Crispin Masterman said the children's names were never placed on the Child Protection Register and it was simply decided to remove them from the family home.
He said meetings were held in private so the couple were not able to correct any of the wrong assumptions made about them.
But the judge added that the criticisms were coupled with an acknowledgement that all professionals involved were acting for the good of the children.
He said: "It is undoubtedly true that social services departments have in recent years operated with inadequate resources and under immense stress and run the risk of attracting equal criticism whether they remove a child or whether they do not."
Robin Tolson QC, who represented the Williams's said the settlement "brings closure at least of a kind" for the family.
"The effect of what happened will continue to be felt for a long time, but at least this now marks the end of four years spent fighting for their children and their rights before the court."
Children's future
After the settlement, Jessica Good, the family's solicitor, who has been with them from the start of the proceedings said she had seen the "tremendous toll" it has taken.
She said: "Today represents a huge relief for them, but this will live with them for a long time to come."
A Newport Council spokesman said: "A settlement has now been reached which will support the children's future. The well-being of the children has remained paramount throughout this case.
"While the local authority has offered their sincere apologies to the family, our priority was always the safety of the children.
"The court concluded that the council acted in good faith given the strength of the medical evidence presented," the spokesman added.
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