Parents complained to the local government ombudsman after discovering the connection, which contravenes rules governing appeals, after an unsuccessful attempt in 2002 to win their daughter a place at Lady Margaret school in Hammersmith and Fulham. They claimed the link was hidden from them at the appeal despite a subsequent school newsletter proclaiming the former clerk's 47-year connection with the school, including time as a pupil and parent.
The girl was denied a place at the Church of England school even though her two sisters are already pupils there.
The former clerk, who denies hiding her relationship to the school, has stepped down from the panel. The ombudsman ordered the compensation payment and said Lady Margaret should review its rules, after finding that the school's admissions criteria allowed it to select pupils on an arbitrary basis.