A jeweller who was wrongly accused of running a theft operation has won a full public apology and "substantial" damages.

Nigel Cowley, owner of Arcade Jewellers in The Arcade, Bognor Regis, was incensed when unfounded accusations levelled against him by Roger Clayden, who runs Clayden and Co jewellers just a few doors away, were published in a local newspaper.

He sued Mr Clayden for slander in the High Court in London.

Yesterday, more than two years after the publication caused Mr Cowley "immense distress and embarrassment", Mr Clayden apologised in court, accepted the allegations were unfounded and agreed to pay damages.

The amount of the pay-out was not disclosed.

Mr Cowley's solicitor, Joanne Mason, said: "The action arises out of allegations made during a conversation Mr Clayden and/or his shop assistant had with a reporter from the Bognor Regis District and Five Villages Reporter.

"During the conversation it was alleged that Mr Cowley had been arrested and charged by police following a raid on his premises where stolen jewellery had been recovered".

It had also been alleged Mr Cowley "had for a number of years been encouraging youths to steal jewellery to order, which he would then sell in his shop," said Miss Mason.

The Reporter published an article in mid-December 1999 under the headline Police Raid Town Centre Jeweller.

Miss Mason told Mr Justice Gray: "Mr Clayden now accepts these allegations are completely without foundation.

"Mr Cowley's shop was not raided by the police and he has never been investigated, arrested or charged by the police in connection with stolen goods, or at all."

Miss Mason said Mr Clayden had now made an unqualified apology to Mr Cowley and expressed his regret that the allegations had ever been made.

She said: "In order to compensate him for the harm done to his reputation he has agreed to pay him a substantial sum in damages and his legal costs. He has undertaken not to repeat the allegations complained of."

Simon Kenny, representing Mr Clayden, said his client wished to offer his "sincere apologies" to Mr Cowley.