Former teacher Sion Jenkins has been refused compensation for the six years he spent in prison before being acquitted of the murder of his foster daughter Billie-Jo Jenkins.
Mr Jenkins had insisted he "fitted all the criteria" for a payout after losing his liberty for six years, which led to his ex-wife deserting him with their four daughters. But the Ministry of Justice rejected his bid, with officials saying that the Court of Appeal made clear compensation should be paid when someone has been shown to be "clearly innocent".
Mr Jenkins' campaigners condemned what they called an "insidious" remark and added: "In which universe does 'not guilty' mean 'not innocent'?"
Billie-Jo, 13, was found with head injuries inflicted by a metal tent peg on the patio of the family's large Victorian home in Hastings, East Sussex, on 15 February 1997.
Mr Jenkins, at the time headteacher-designate at all-boys William Parker School in Hastings, said Billie-Jo must have been killed by an intruder. He was convicted of murder at Lewes Crown Court but freed on appeal. Juries failed to reach verdicts in two retrials.