Winchester College has reached an out-of-court settlement with its two sacked chaplains shortly before a potentially embarrassing employment tribunal.
The Reverends Robert Ferguson and Nicholas von Malaise, his deputy, were fired last summer after confidential information about alleged fee-fixing at the pound;22,300-a-year school was leaked to The Times.
They were dismissed after failing to reveal in 2003 that pupils had confessed to hacking into the school computer system and obtaining information that was later leaked. Mr Ferguson, and Mr von Malaise, denied any wrongdoing and took their case to an employment tribunal. They had to leave their homes, which were tied to the school, within weeks of their sacking.
A spokesman at the tribunal's Southampton office said: "The case was due to be heard this summer but has now been settled. The details of the settlement are private."
The chaplains could have been awarded a maximum of pound;55,000 each.
The college has declined to discuss its reasons for settling the dispute but fear of publicity over the fee-fixing controversy involving 60 schools, which is still being investigated by the Office of Fair Trading, may have been a factor.
A campaign for the chaplains was also exerting pressure. A website, called www.winchesterchaplains.com, garnered some 200 expressions of support from former pupils and their parents.
The TES has obtained a copy of a letter to parents from Sir Andrew Large, the Warden, or chairman of governors, who is a deputy governor of the Bank of England.
In it he says: "I am glad to say that this matter has now been resolved as a result of mediation.
"This is a process which does not attempt to decide who is at fault or apportion blame, but merely seeks to find a compromise acceptable to both sides without the considerable disruption and irrecoverable cost of employment tribunal proceedings.
"As a way of drawing a line under the matter, both parties agreed that the dismissal of the chaplains would be rescinded and that the chaplains would resign."
Another letter, agreed by the school and the chaplains, was sent to parents.
It said: "As the Warden and Fellows have always sought to make clear, their disagreement with the chaplains related to managerial issues and did not involve any impropriety.
"The College has also always made clear, and I am happy to do so again, that we have at all times appreciated their work as teachers and pastors and the commitment they have shown to pupils and the community."
But it added: "The chaplains acknowledge that, with the benefit of hindsight, they should have reported to the headmaster the matters they discovered in the summer of 2003 sooner than they did."
Neither former chaplain was available for comment.