A boss who frogmarched a worker to the police station with a sign saying "thief" around his neck has paid out £13,000 after being sued for "humiliation".

Mark Gilbert, a 40-year-old floor fitter, was paraded through Witham, Essex, with a handmade cardboard sign saying "Thief. I stole £845 am on my way to the police station."

His boss, Simon Cremer, found Gilbert had written out a company cheque to himself and taken it to Cash Converters in October 2008. Gilbert confessed to police and was cautioned while Cremer was taken to court for false imprisonment. The case against the flooring firm boss collapsed but he has paid £5,000 compensation and £8,000 legal costs after Gilbert sued for two years worth of lost earnings, distress and psychological help he said he needed after the incident.

Cremer, 47, who runs In House Flooring, of Witham, said: "I think it's absolutely disgusting that he was even able to sue me after he had stolen from me, to be honest.

"He stole from me yet he is the one who is walking away with the money. It makes me so angry."

The case had been due to come before a civil court but Cremer said he could not risk the expense involved in fighting the damages claim. Cremer said: "It would have cost me £25,000 just to go to court, so I had no option but to settle."

Speaking after the incident, in 2008, Gilbert said he had feared he was going to be killed as he was bundled into the back of a van.