A Liverpool-based employment tribunal voted unanimously to dismiss Susan Maloney's case against Parish Church of England primary, in St Helens. The 52-year-old was suspended in March 2001, after she called a nine-year-old boy a wimp. She subsequently resigned.
Mrs Maloney, who had an unblemished record, said: "It was completely, totally unexpected. But I got something of what I wanted: I wanted people to know the truth about my resignation."
She had taught at Parish for 29 years prior to her suspension and has since found a new post, as a classroom teacher at Florence Melly primary in Liverpool.
"I do not want my job back - I'm very happy where I am," said Mrs Maloney. "But I want a conclusion: I have had this going on for nearly two years now."
She claims that her former employers are deliberately obstructing her efforts to put the episode behind her.
When Mrs Maloney visited the school last month to collect her possessions, she discovered that almost 30 years' worth of teaching resources had been removed from her classroom.
"Twenty-nine years of resources have gone up in a cloud of smoke. It shows a total lack of respect," she said.
"There were books there I had had since I was a child. And there was a photo of me as a child with my mum - sentimental stuff that belonged to me."
Jenni Watson, national secretary of Redress, the organisation representing Mrs Maloney, hopes to appeal against the decision in the new year, once the tribunal has published its full verdict.
She claims that Mrs Maloney's four-month suspension was the result of a personality clash with a younger headteacher.
"I do not know how, if the tribunal understood what was in front of it, it can have come to that conclusion. Sue has been breaking out in tears, because we just do not know what is happening," she said.
But the Rev Christopher Byworth, chair of governors at Parish, welcomed the tribunal's decision.
"I am very upset that this has happened: a tiny incident has blown up into a major matter," he said. "The headteacher has been hurt by this, and she has every reason to be. I would have been absolutely gobsmacked if the decision had gone any other way."