Princes William and Harry's former nanny on Thursday received substantial damages from the BBC over "false and malicious" claims about her used to obtain a 1995 interview with Princess Diana.
Alexandra Pettifer, known at the time as Tiggy Legge-Bourke, was given a public apology for "fabricated" allegations that she had an affair with the princes' father, Prince Charles.
The High Court in London was also told that she was falsely accused of becoming pregnant by him when she was his personal assistant and of having an abortion.
Pettifer's lawyer Louise Prince said the allegations caused "serious personal consequences for all concerned" and her client did not know where they came from.
But she said it was likely that the "false and malicious allegations arose as a result and in the context of BBC Panorama's efforts to procure an exclusive interview with Diana, Princess of Wales".
The explosive interview saw Diana detail her troubled marriage to Charles, his affair with Camilla Parker Bowles, and how she had also been unfaithful.
Questions were immediately raised about how little-known interviewer Martin Bashir secured Diana's agreement to take part in the programme, which sent shockwaves through the royal family.
It has since emerged that he used subterfuge, including fake documents alleging some of her aides were in the pay of the security services.
Pettifer's lawyer said the "totally unfounded" claims "appeared to exploit some prior false speculation in the media" about her and Charles.
"After Diana, Princess of Wales, became aware of the allegations in late 1995, she became upset with the claimant without apparent justification," she added.
Prince said Pettifer "holds the BBC liable for the serious impact the false and malicious allegations have had" which had caused her "25 years of lies, suspicion and upset".
Pettifer said she was one of many people whose life had been "scarred" by the way the programme was made and the BBC's failure to investigate properly afterwards.
"The distress caused to the royal family is a source of great upset to me," she added.
"I know first-hand how much they were affected at the time, and how the programme and the false narrative it created have haunted the family in the years since."
BBC director-general Tim Davie confirmed the corporation would pay "substantial damages" to Pettifer and pledged not to show the programme again.
He also apologised to her, Charles, William and Harry "for the way in which Princess Diana was deceived and the subsequent impact on all their lives".
The BBC has previously paid damages to Diana's former aide Patrick Jephson and a graphic designer who blew the whistle on the underhand methods used.