David Valentine, 62, of Bromsgrove, Worcs, was investigating Paul Eagles for benefits offences while working for Windsor and Maidenhead Council.
He started an affair with Mr Eagles's partner, Joyce Pinfield, who then said Mr Eagles was threatening her.
As a result, Mr Eagles, of Maidenhead, was jailed for three months.
An employment tribunal in Reading, Berkshire, heard when Mr Valentine's employers found out he was having an affair with Mrs Pinfield he was suspended and later sacked.
Mr Eagles was released from jail in January 2006 and the case against him dropped.
' Shakespearean tragedy'
Mr Valentine, a former police officer, had claimed his sacking was unfair as the council relied on matters raised by Mr Eagles and that he had not been allowed to defend his position.
Throwing out the case, tribunal chairman Christopher Byrne said: "A relationship formed between the claimant and Mrs Pinfield in November 2005, which developed in to a sexual relationship by January 2006 and resulted in Mr valentine leaving his wife and children to live with Mrs Pinfield.
"He fatally compromised the witness evidence he had obtained from Mrs Pinfield pertaining to pending prosecutions of Paul Eagles.
"The extent of the relationship put his credibility in doubt."
Afterwards, Mr Valentine said he felt he had been made a scapegoat.
Mr Eagles likened the whole situation to a Shakespearean tragedy and said he was thinking of suing the council for the time he spend in jail.
^ Back to top | BBC Sport Home | BBC Homepage | Contact us | Help | ©