The two officers, Detective Constable Alan Purvis and Detective Sergeant Peter Foley, also received full legal costs in an out-of-court settlement at Croydon County Court. The case had taken seven years to come to court.
The officers' solicitor, Clive Howard, accused the Metropolitan Police, for whom the officers still work, of acting in an 'appalling' manner.
A statement from the Metropolitan commissioner, Paul Condon, gave an unreserved apology to both men. It said: 'The officers have spent the last seven years living under a cloud since they were unreasonably accused of killing Daniel Morgan in a vicious attack with an axe.'
Mr Morgan, a private investigator, was found dead in a pool of blood with a 14-inch Chinese axe embedded in his face outside a pub in south London in March 1987.
John Rees, Mr Morgan's business partner, and three police officers, Mr Purvis, Mr Foley, and DS Sydney Fillery were all arrested in connection with the murder, but never charged. Mr Fillery has since left the police force and has brought no action. Mr Rees still has an outstanding claim for damages.
Among a number of theories put forward for the officers' alleged motive in carrying out the murder related to Mr Rees. His investigation firm, in partnership with Mr Morgan, was called Southern Investigations. A year before the murder the three detectives had helped out at a car auction firm that had hired Southern Investigations to protect the business. The men, 'by letting their presence be known', were supposed to have helped with security.
The theory put forward was that Mr Morgan was about to tell the police of the officers' help. They would have been accused of 'moonlighting' and drummed out of the force. So they were supposed to have killed Mr Morgan.
Other theories alleged that police officers had taken up an offer of pounds 1,000 to kill Mr Morgan put out by Mr Rees.
'It was all a load of nonsense,' Mr Howard, of the solicitors' firm Russell Jones and Walker, who represented the officers, said.
The officers were held and questioned for 19 hours before being released due to lack of evidence. All three officers were later subjected to an inquiry by Scotland Yard's internal complaints department.
After the Scotland Yard inquiry, Hampshire Police were involved in an 18-month investigation. Three people were charged, but the charges were later withdrawn. No person has since been charged.Reuse content