The Daily Mail has apologised and made a four-figure donation to Barnardo's over the way it reported comments by the charity's chief executive about Baby P last November.
Martin Narey complained to the Press Complaints Commission about a Mail story with the headline: "'Baby P would have grown up to be a feral, parasitic yob', claims leading child campaigner."
Narey said the newspaper had failed to make it clear that he had used the descriptions only as examples of how society might refer to disadvantaged children.
He withdrew the complaint after receiving the donation and a "gracious" letter of apology.
"Although many of our supporters knew the story must be fictional, some believed it and wrote to me in angry terms," he told Third Sector.
"Regrettably, the flames of the Mail's accusation were fanned by politicians and at least one charity CEO, who were content to criticise me based on the newspaper's version."