The Employment Tribunal has ordered the International School in Birmingham to pay pound;22,307 in compensation to Eileen Hunter, the sacked teacher.
It found that Sir Dexter Hutt, executive head of the Ninestiles Federation of schools, had verbally attacked her at a staff meeting, having already taken the decision to suspend her.
"It amounted to nothing less than character assassination," said the tribunal chairman.
Mrs Hunter, 44, had spoken out against Sir Dexter's tough behaviour policy, with which he sought to turn around failing schools such as the International School.
She confronted Sir Dexter and David Miliband, then schools minister, when he spoke at the school.
Sir Dexter later forcibly excluded her from a meeting, the tribunal said, effectively humiliating and isolating her.
The tribunal agreed with the school that Mrs Hunter, a National Union of Teachers representative, had behaved unacceptably in meetings with other staff. It reduced the damages by pound;5,576, accordingly.
But it did not accept that she had mounted a campaign to undermine and destroy the credibility of the school's leadership.
Mrs Hunter, who now teaches elsewhere, said she had been appalled that he had given fixed-term exclusions to 444 pupils in his first year. He treated staff the same way, she said.
"The fact that he is knighted for his services to education is outrageous," she added.
But Sir Dexter, who had not seen the judgment, was unapologetic.
"I would say that the school has benefited, and the students' education was enhanced, by the departure of Mrs Hunter from the school," he said.
"To achieve the best for the students has always been my main responsibility."
The tribunal had earlier found that the school unfairly dismissed Mrs Hunter's daughter, Natara Hunter.
Tony Pearce, the NUT regional officer who represented both women, said the school leaders had put their priorities ahead of the interests of their staff.
"It says something about how the Government's education results are achieved," he added.
The charismatic Sir Dexter has previously told The TES that he works 75-hour weeks and earns pound;130,000 a year - less than he would earn in the private sector.
"I think people come into the public sector because they want to make a difference," he said.