A teacher who was suspended on full pay for nine years resigned this week leaving taxpayers with a pound;1 million bill.
Anthony McNally, 54, left his pound;25,000-a-year post after agreeing a settlement with his local education authority.
The English teacher was suspended from Woodhey high school, in Bury, Greater Manchester, in March 1995, after a 15-year-old boy accused him of "inappropriate touching".
It is thought to be the longest period a teacher has ever been suspended from their job. None of the claims against Mr McNally were ever proven.
Since then education officials and union leaders have been locked in a legal wrangle which has gone to the High Court, and prompted intervention from two Secretaries of State.
The bill, being paid by Bury Council, covers Mr McNally's undisclosed settlement, the pay he was paid during his suspension, legal fees, plus wages of the teachers who took over his duties.
Last night Chris Keates, deputy general secretary of the National Association of Schoolmasters Union of Women Teachers, said: "One of the key reasons why NASUWT is continuing its campaign for anonymity for victims of malicious allegations is to secure appropriate procedures to prevent teachers facing false accusations from being barred from employment for an astonishing period of time."
David Higgins, Conservative councillor for Tottington, where Mr McNally lives, said: "This has been a ridiculous situation and a ridiculous amount of money has been spent on it. I cannot believe it has been going on for this long.
"The money could have been spent on a million and one things more worthwhile than this such as schoolbooks and facilities for schoolchildren."
Mr McNally, who lives in Tottington, taught English at Woodhey high school from 1979 until 1995 when the allegations were made against him.
Investigations by the police, the National Society for the Prevention of Cruelty to Children and school governors had all cleared the teacher of the allegations made against him.
In 2001, Mr McNally said: "Throughout these years I have felt a growing anger and frustration at not being able to do what I am good at, teaching.
I am now experiencing mixed emotions, anger at why it has taken so long to get this far, but relieved that common sense has prevailed."
He added: "These years have been extremely stressful. It has been a time of uncertainty living from day to day, week to week, unable to plan for anything other than in the short term."
A Bury Council spokesman said this week: "I can confirm that this matter has now been settled by mutual agreement and to the satisfaction of all the parties concerned as of December 31."