Former MP Harvey Proctor said he hopes the size of his £500,000 compensation payment from Scotland Yard will deter police from “assuming the guilt of innocent suspects”.
The former Conservative politician, whose home was raided following false claims of a VIP paedophile ring made by fantasist Carl Beech, is to receive £500,000 from the force over its disastrous investigation into the allegations.
He will also receive nearly £400,000 from the Metropolitan Police towards his legal bills, the force told the PA news agency.
In a statement released on Friday, Mr Proctor said he had accepted what is believed to be the largest ever settlement for negligent behaviour made by a British police force other than in cases where the victim has been imprisoned.
He said Metropolitan Police Commissioner Cressida Dick had “failed abjectly in her duty and should resign”.
Mr Proctor added: “I hope the size of this award will deter police from assuming the guilt of innocent suspects and from misleading judges in order to obtain search warrants.
“I shall now seek to repair my damaged life in the years that are left to me.
“I know this will not be an easy task or one that is necessarily achievable or even attainable, but not attempting to do so would run contrary to the human spirit of survival.
“I have sought to do what was right in all the circumstances.”
Operation Midland, which began in 2014, saw dawn raids on the homes of 72-year-old Mr Proctor, the late D-day veteran Lord Bramall, and Lord (Leon) Brittan, following a series of allegations that turned out to be lies.
Beech, then known as “Nick”, falsely claimed that he and other boys were raped and tortured in the 1970s and 1980s by members of a VIP paedophile ring.
He is now serving an 18-year prison sentence for 12 counts of perverting the course of justice and one count of fraud.
Mr Proctor said that he did not want to make a “fortune” in compensation but “just enough to put my innocence beyond doubt” although it was a pity that the compensation had to come from public funds.
He added: “I am heartily sick of these police and their mealy-mouthed apologies to me and I did not want to take a fortune from public funds.
“Just enough to put my innocence beyond doubt, and to warn police not to make this same mistake with other people.
“It is a pity that the damages must come from public funds. They should come out of the pension pots of the police who made these grievous mistakes.”
The Met was heavily criticised over Operation Midland in an independent review of the case by former High Court judge Sir Richard Henriques.
He reprimanded the force for believing Beech for too long, detective superintendent Kenny McDonald for announcing publicly that Beech’s claims were “credible and true”, and officers for applying for search warrants with flawed information and for failing to close the investigation sooner.
Earlier this month, Mr Proctor announced he had reported five former Met officers to Northumbria Police in a bid to spark a fresh inquiry into the investigation.
Northumbria Police has referred the matters back to Scotland Yard.
A spokesman for the force said it is “assessing the complaint”.
The Independent Office for Police Conduct found no evidence of misconduct or criminality by the officers during Operation Midland.
Mr Proctor said he required a full criminal investigation of potential wrong-doing by officers in Operation Midland.
He added: “I am now the only surviving figure still alive wrongly accused of these heinous crimes.
“In a way I also speak for those whose voices have been stilled. It is appropriate that Field Marshall Lord Bramall and Lord Brittan should be remembered today for their service to Queen and country.
“Both were outstanding achievers and men of the highest probity.
“It will take a very long time, if ever, for me to personally have confidence in the Metropolitan Police Service.”
Speaking on LBC radio, Prime Minister Boris Johnson said: “I think what happened to Lord Bramall was appalling and I feel very sad… and indeed for Leon Brittan and for others.”
Asked if the police should face prosecution, Mr Johnson added: “That’s a difficult question Nick, whether or not the police should face prosecution.
“I haven’t studied the evidence with sufficient detail.”
He continued: “It’s clear that misjudgments were made and I know that you’ve had the Commissioner on, several times to talk about this.
“If it is possible to have legal redress then obviously that should be sought.”