The payment was made to the young woman in January 2016, two years after it was alleged disgraced Castlebrae High head Derek Curran had been involved in a sexual relationship with her.
The former pupil claimed she started having sex with Curran when she was 15 and later had his child, a son, after turning 18.
Some opposition members on Edinburgh City Council had demanded a probe into the payment – fearing it was to gag her from giving evidence in an unrelated court case involving Curran.
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However, the payment, understood to be less than £30,000, related to the woman’s complaint that Curran’s colleague, Gavin Atkinson, had sent her ‘inappropriate’ emails.
Atkinson was dismissed and successfully prosecuted in court on other charges. Charges relating to the woman paid compensation were dropped by prosecutors.
The allegations surfaced under the council’s own whistle-blowers scheme which offers protection to people who call out wrongdoing.
The scheme was recently described as a ‘significant stride forward’ by QC Susanne Tanner in a report compiled after concerns about a so-called ‘old boys’ network protecting senior officials and the Sean Bell scandal. Senior social worker Bell was found dead days after he was charged with a string of historic abuse and sex offences amid claims his offences had been covered up by high-ranking officials.
In April 2016, science teacher Atkinson was found guilty of assaulting a teenage boy and making sexual comments to a female pupil. He was subsequently sentenced to do 100 hours community service.
In July that year Curran pleaded guilty to behaving in a threatening or abusive manner at the Sick Kids Hospital in January 2014.
He was cleared of a series of assaults on his estranged wife Anne Bergseng and another woman while both were pregnant.
The adult learner at the centre of the Atkinson emails claims – described in court as a ‘trainee teacher’ – was given a payment and signed a non-disclosure ‘gagging’ agreement.
Prosecutors dropped allegations concerning the learner teacher which referred to a conversation of a sexual nature, reference to underwear and to sending her emails of a sexual nature.
Following the case it had been suggested that she was paid to stop her from appearing in court to give evidence against Curran, who was named during the probe into Atkinson.
Curran didn’t follow due recruitment process when hiring Atkinson and he was dismissed..
He is due before the General Teaching Council for Scotland accused of failing to deal with the complaints of sexual abuse, which he denies.
The one-time ‘super head’ was also implicated during the investigation, as it emerged that he was named by the same victim as the teacher she had a sexual relationship with.
Ahead of his tribunal Tory leader Ian Whyte had demanded that the council address concerns about the payment made in January 2016.
However, the Tanner Report stated: “The Review Team has examined this particular claim and is satisfied that there is no evidential basis to support the assertion that an improper payment was made.”
The concerns – raised several times by opposition councillors - follow a series of scandals involving alleged child protection failures, bullying, intimidation and cover-up.
Curran, now 61, was facing eight charges of allegedly assaulting women but six of were thrown out of court in June 2016, after the young woman who claims she had his child withdrew from giving evidence.
Councillor Ian Whyte had urged the local authority to “clear up suspicions about the payment”, calling for “reassurances” that it was all above board and not connected to criminal proceedings against Curran.
Sources close to the young woman, a single mother, claimed that she was afraid of speaking out and felt under pressure after accepting the pay out over the Atkinson scandal.
Curran was sacked for gross misconduct in September 2015 but in 2018 he won an unfair dismissal claim after a judge found that the authority "failed to follow a fair procedure".
It was ruled that the failure to report the historic abuse allegation amounted to gross misconduct. However, the council had lumped other charges against him together with the abuse claim when dismissing him. The judge found that the other allegations against Curran did not amount to gross misconduct and he was awarded almost £10,000 in compensation.
Curran denies failing to adequately assess the seriousness of the original complaint against a fellow teacher or to ensure an investigation was properly conducted. He also denies failing to take appropriate action in line with the council's child protection guidelines.
Police Scotland confirmed it was asked to investigate the payment over the Atkinson case for any suspicion of wrongdoing.
A spokesperson said: “In 2020, police in Edinburgh were made aware of allegations surrounding a settlement paid by Edinburgh City Council. Enquiries were conducted and no criminality was established.”
A council spokesperson said: “These claims have been independently looked at – and subsequently confirmed to be unfounded – by both Police Scotland and Susanne Tanner QC.”