X Factor judge Louis Walsh has reached an out of court settlement with the Sun newspaper after it falsely accused him of carrying out a nightclub sexual assault on another man.

Walsh has been awarded 500,000 euro (£403,500) in damages and the paper has issued him with an apology.

Sky News reports that the Sun admitted the claim, which was made by an unemployed dance teacher, Leonard Watters, was false and apologised to Walsh accepting that the “alleged assault did not occur in the first place”.

Speaking outside Dublin High Court, Walsh, 59, said: “I’m very relieved. This has had a terrible effect on me guys. It was all lies.

“And I’m very satisfied with this total vindication for me, but I remain very angry at the treatment I received at the hands of the Sun.”

The paper published an article on 23 June, 2011, with the headline “Louis Probed Over ‘Sex Attack’ on Man in Loo” in which it wrongly claimed Walsh had groped Watters at a celebrity nightclub following a Westlife concert in April 2011.

Mr Watters was subsequently jailed for six months for making the false allegations.

The story threatened to end Walsh’s career as a manager of pop bands including Westlife and Boyzone, as well as his TV career as a judge on The X Factor.

Walsh’s lawyer, Paul Tweed, said that a great deal of damage had been done to his client because of the online nature of the story and added that it was something he hoped Lord Leveson would address in his report on press standards, due to be published tomorrow.