Heather Mills, the wife of the former Beatle Sir Paul McCartney, has been awarded £50,000 libel damages over an article in the Sunday Mirror.
The story wrongly suggested that there were grounds for suspecting her of dishonesty over money collected for an earthquake appeal.
The 34-year-old former model was in the United States with Sir Paul when an agreed statement was read before Mr Justice Gray at the High Court in London yesterday. Her counsel, Thomas Shields QC, said that the "highly damaging and wounding" allegations, in a Sunday Mirror report in May, were "wholly without foundation".
Ms Mills, who had a leg amputated after a traffic accident in 1993, has been active in raising money for those who have lost limbs. She said she would donate her £50,000 award to her own "Adopt a minefield" charity.
Her publicist, Anya Noakes, said later: "Heather Mills is pleased that the Sunday Mirror has recognised that the allegations were unfounded and that her reputation has been vindicated."
Ms Mills – Lady McCartney since her marriage earlier this year – had brought the action against Mirror Group Newspapers, which agreed to pay her legal costs.
Mr Shields said that the Sunday Mirror article left the reader with the impression that there were reasonable grounds to suspect that Ms Mills had been guilty of a serious lack of proper accounting in relation to funds raised from the public for the victims of the earthquake in the Indian state of Gujarat in January 2001.
The article had claimed that, of £250,000 allegedly raised, only £25,000 had been distributed. Mr Shields said that the total raised was just more than £68,000, and all of it had been properly distributed.
There was also no truth in the suggestion that she was being investigated by the Charity Commission because she had illegally failed to register her Lion's Charitable Trust in England and Wales. That charity was based in India and there was no need for it to be set up in England. Mr Shields said that the publication of the article, shortly before her marriage, caused Ms Mills considerable distress.