Manchester United star Ryan Giggs has accepted there was no basis for accusing TV presenter Imogen Thomas of blackmail, the High Court has heard.
She took legal action after the Sun accused her of having an affair with a footballer - later named as Mr Giggs - which led him to seek an injunction.
The legal order, which prevented the publication of his name, was granted on the basis that Ms Thomas, 28, appeared to be trying to blackmail him.
Ms Thomas said she had been vindicated.
In a statement read outside the court in London on Thursday, Ms Thomas, the 2003 Miss Wales and former a Big Brother contestant, said: "To suddenly have to defend my character because of this legal process has been extremely upsetting and stressful.
"I'm just relieved that the parties and the court now accept that I'm no blackmailer. I have been vindicated and that's all I wanted.
"I have nothing to add - it's all behind me now."
The High Court heard that in the witness statement supporting Mr Giggs's injunction application, he had said Ms Thomas's conduct had led him to suspect she was thinking of selling her story to the press.
The former Welsh international was the subject of fevered press speculation about his identity"He also said that she had asked him for money to assist in the purchase of a flat and that he had become suspicious about her motivation," Ms Thomas's advocate, David Price QC, said.
He added: "Notwithstanding these qualifications in the judgement, the allegation of blackmail was widely and prominently reported by the media as if it were established fact.
"This was not correct. It has been extremely damaging and distressing to Ms Thomas."
Mr Price also said the Sun had now made it clear Ms Thomas had not been responsible for the article in April.
On granting the injunction preventing the publication of further details of Ms Thomas's and Mr Giggs's alleged affair, the judge had said it appeared Ms Thomas was trying to blackmail the footballer.
The case dominated the news agenda in the spring as speculation mounted about the identity of the "high-profile" footballer behind the injunction.
Mr Giggs, 38, a former Welsh international who has played for Manchester United for 20 years, was then widely identified on social networking sites, a Scottish newspaper, and eventually named in Parliament.
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