Ellen Myrup had been a part-time teacher at St Margaret's in Hampstead for 11 years when she was sacked in July 2003 by headmistress Suzanne Meaden who claimed she was incompetent.
But Ms Myrup said she was the victim of a "sinister" campaign of harassment and in April, the Central London employment tribunal ruled that she had been unfairly dismissed.
Last week she was awarded pound;21,000 for loss of earnings over two years. The relatively small award reflected the fact that she has been able to earn money as a private tutor.
"I am not a feeble person but this experience has changed me," said Ms Myrup. "It is incredibly sad, and I regret having been through this very destructive process but I did not have a choice.
"Too much happened and too many people were very, very unhappy and I wasn't the only one. It was the principle of it."
Mrs Meaden did not want to comment on the case.
In a statement to the tribunal, Ms Myrup said the head watched her during her lessons, severely criticised her teaching methods, did not provide her with teaching assistance and would yell at her in front of pupils.
Six former teachers and two former parents provided evidence of Mrs Meaden's bullying of teachers and students.
St Margaret's is a small, private girls' school and was founded in 1884. It charges up to pound;8,100 a year.
The Independent Schools Inspectorate visited the school in 2001 and described it as "a good school, with some significant strengths, providing a generally broad education appropriate to the ages and abilities of its pupils".
But Ms Myrup said: "The inspectors come in for a few days and everything looks lovely and they cannot see what is actually going on."
Ms Myrup, an organist originally from Denmark, started work at the school in 1991 and the school was satisfied with her teaching until 2001, when an inspection was made. Following a general comment by the inspectors about the quality of music provision at the school, a report was commissioned into the department. The report was subsequently used by Mrs Meaden as the basis for Ms Myrup's dismissal.
In the tribunal decision released in April, the chairman found the head had been "unfair for various reasons" throughout the whole disciplinary process.
An improvement plan had no set aims and the school had made little effort to help solve perceived problems with Ms Myrup's teaching.
The tribunal also criticised a governor of the school, Mrs Cavanagh, for finding Ms Myrup "guilty" before a disciplinary hearing had even started.