Stagg awarded £706,000 compensation

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Colin Stagg was acquitted of murdering the 23-year-old ex-model who was stabbed to death on Wimbledon Common in 1992. The case was thrown out on the grounds that police used a "honey trap" plot to encourage him to confess.

Solicitor Alex Tribick said the special payment would help his client to "try and rebuild his life".

Last year Stagg was told he is eligible under a discretionary compensation scheme, with the amount to be set by independent assessor Lord Brennan.

Stagg, 44, of Roehampton, south-west London, spent a year in custody before the case was thrown out at the Old Bailey in 1994.

Ms Nickell was walking with her two-year-old son on Wimbledon Common when a man stabbed her 49 times and sexually assaulted her.

Robert Napper, 41, was charged with murder last November after a review of Miss Nickell's murder. He is due to face trial in November.

Mr Tribick said the offer was made in a letter from the Office of Criminal Justice Reform following an application for compensation.

He said Lord Brennan submitted a "carefully considered and reasoned" 70-page document supporting the award.

Following the award Mr Stagg said: "It still has not sunk in properly, in regard to my compensation. I thought at first my solicitor was joking. I thought the Establishment would make a token payment but this is like winning the lottery."