A Libyan dissident forcibly returned to Tripoli in 2004 to face imprisonment and torture has accepted over £2 million in compensation in a settlement with the British government over its role in his illegal rendition.
Ministers have agreed to pay £2.23m compensation to the family of Sami al-Saadi but have not admitted liability.
Mr Saadi was forced aboard a plane in Hong Kong along with his wife and four young children in a joint British-US-Libyan operation.
In Tripoli he was imprisoned and tortured by the Gadaffi regime.
Evidence of Britain's involvement emerged after the regime fell last year.
CIA correspondence with Libyan intelligence, discovered by Human Rights Watch in Tripoli, states: "we are … aware that your service had been co-operating with the British to effect [Mr Saadi's] removal to Tripoli … the Hong Kong government may be able to co-ordinate with you to render [Mr Saadi] and his family into your custody."
The operation followed Tony Blair's "Deal in the Desert" with late dictator Muammar Gadaffi, which saw Britain agree to help track down and hand over his opponents.
Mr Saadi said: "My family suffered enough when they were kidnapped and flown to Gadaffi's Libya.
"They will now have the chance to complete their education in the new, free Libya. I will be able to afford the medical care I need because of the injuries I suffered in prison.
"I started this process believing that a British trial would get to the truth in my case. But today, with the government trying to push through secret courts, I feel that to proceed is not best for my family.
"I went through a secret trial once before, in Gadaffi's Libya. In many ways, it was as bad as the torture. It is not an experience I care to repeat."
Reprieve legal director Kat Craig said: "We now know that Tony Blair's 'Deal in the Desert' was bought with ugly compromises.
"Perhaps the ugliest was for MI6 to deliver a whole family to one of the world's most brutal dictators. There needs to be a full and fair inquiry into these issues, and it ought to get started right away."
A second Libyan, Abdul Hakim Belhaj, who also suffered rendition and torture, will continue to pursue legal action against the British government.
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