A black youth worker has been awarded £22,000 by police after officers arrested him while watching a man being stopped and searched.
Ken Hinds, 50, was confronted by British Transport Police (BTP) officers at a north London Tube station in 2004.
He was arrested and charged with threatening behaviour, sparking a five-year battle to clear his name and win an apology.
Chief Constable Andrew Trotter apologised to Mr Hinds of Edmonton, north London, today and agreed to pay compensation and his legal expenses.
The settlement was made at the 11th hour as the force faced a High Court trial over claims of false imprisonment and malicious prosecution next month.
The case is acutely embarrassing for BTP because Mr Hinds runs a carnival band known as Ruff Diamond Explosion, sits on the Metropolitan Police's Black Independent Advisory Group and is chairman of a monitoring group for stop and search in Haringey.
Speaking after the apology, Mr Hinds said: "My message to them is: we understand you've got a difficult job and you won't get it right 100 per cent of the time.
"We want you there to help safeguard our communities, but we want you to do it in a fair and just way.
"When you do make mistakes, say sorry, it's not a big deal. I should not have had to take legal proceedings to force you to do so."
The youth worker was arrested as he waited to pick up his 12-year-old son at Seven Sisters Tube station on 28 May 2004.
Mr Hinds said a BTP constable approached him and told him to "f*** off" before claiming he had abused him.
He was arrested, taken to Wood Green police station and charged under the public order act.
Mr Hinds stood trial in May 2005 and was acquitted after the court heard how the statements of two officers were suspiciously similar.
After the case, a police misconduct inquiry took place and investigators found one officer had emailed the second his statement. The two officers received written warnings.
The force apologised in a one-paragraph statement faxed to Mr Hinds' solicitors.
It read: "The British Transport regrets the circumstances in which Kenneth Hinds was asked to move away from officers conducting a stop and search of a young black male at Seven Sisters Underground Station on May 28 2004 and wishes to apologise for this. No admission is made of liability."
A spokesman added: "The actions of the officers were subject to an investigation which was overseen by the Independent Police Complaints Commission.
"The investigation found that the officers had fallen below the performance standard but their actions were a result of inexperience and not malice.
"Following the investigation the officers were appropriately disciplined including formal written warnings and the identification of training needs.
"BTP regrets the circumstances of the incident and an apology was issued to the man who was subject to their actions. He was also awarded compensation."