Four children who were incarcerated in detention centres for 13 months – the longest time children have ever been locked up in the UK – have won a six-figure compensation payout from the Home Office more than eight years after their release.

The case of the Ay family, Kurdish asylum seekers from Turkey, hit the headlines because of the length of time they were detained and the ages of the children – the youngest, Medya, was just seven when the family were arrested and locked up in 2002, Dilovan was 11, Newroz was 12 and Beriwan was 13.

Celebrities including Colin Firth and JK Rowling offered their support to the family, along with Desmond Tutu, other church dignitaries and politicians. Their case became so infamous that Radio 4 broadcast a play about it in 2006, Broken English, written by Frank Deasy. The family have their own Wikipedia entry.

The civil action was settled out of court. The family's lawyer claimed that they had been detained unlawfully and for too long. Child asylum seekers are no longer detained for long periods but controversy persists about new rules that allow them to be kept in a short-term holding facility for up to a week. The exact details of the payout are not allowed to be revealed for legal reasons.

David Blunkett, who was home secretary at the time, was determined that the family should be removed to Germany, the country where they had first claimed asylum. The family was fearful that on arrival on German soil they would be sent straight back to Turkey, where the children's father, Salih, and mother, Yurdagul, had both been persecuted, so they tried various legal actions to resist forced removal from the UK.

Through the media the children documented the damaging effect that being locked up was having on them. "The government and the police in the UK broke our hearts," said Beriwan.

The children showed signs of trauma while they were in detention and more than eight years after being released they are still living with the effects.

Most of their time in detention was spent in Dungavel immigration removal centre in South Lanarkshire, Scotland. There Newroz's hair started to fall out, she developed a hand tremor and found it difficult to eat. Medya had recurrent nightmares, while Beriwan and Dilovan were said to harbour pent-up anger.

"We spent 13 months with my mum and the four children crammed into one room. Before we went to sleep each night the guards counted us, something we really hated. Now freedom for me means being able to sit in a room all by myself," said Beriwan. "If human beings don't have their own private space they can become very aggressive.

"A lot of our time in detention was spent just sitting around watching TV and not doing very much. I longed to be back at school with my friends in Gravesend, the place we were living in before we were arrested and detained."

For Medya one of her abiding memories is of a yellow line painted on the ground in the outdoor play area. "If we stepped over that yellow line we got told off," she said.

The children, all but one of them now adults, are still suffering the consequences of their time in detention.

"I still get scared if someone rings the doorbell," said Newroz. "I think it's someone coming to take us away again. And even after eight years I have difficulty sleeping."

Beriwan said that many things triggered memories of their time in detention."Both I and my sister Newroz started our periods in detention so we have a monthly reminder of our time there."

One of the things the Ay family is most angry about is the way their time in detention stunted their ability to study. Beriwan had hoped to be a lawyer and Newroz a doctor, but they believe their hopes were thwarted by their time in detention. Beriwan and Dilovan now work for Deutsche Telecom, Newroz has been working as an assistant to a laser surgeon, while Medya is still at school.

"When we arrived in the UK in 1999 we learned English very quickly and excelled at school," said Beriwan. "In detention we didn't get much of an education and since leaving detention we've all found it much harder to study. The Home Office stole not only part of our childhood but also our future.

"We're happy to have received this money," she added. "It sends us a message that what the Home Office did to us was wrong. But I would much prefer to have no money and to have never gone through the ordeal of detention."

When the children arrived in Germany they were allowed to remain there on the grounds that they were so psychologically damaged by their time in UK detention that they needed specialist medical treatment which would not be available to them in Turkey.

The writer Thomas Keneally supported the family while they were in detention and condemned their treatment there. At the time he said: "In a liberal democracy you can only maintain a policy of locking children up behind barbed wire by spreading lies and demonising the dispossessed of the earth. In the future, these children will tell their stories. There's bound to be literature that comes out of it, and people will gasp and say, 'How did that policy ever get through?'"

David Blunkett was unavailable for comment.

A UK Border Agency spokesman said on Friday: "In March 2011 we established a new family returns process that ended the detention of children. This ensures that families with no right to be in the UK are given every opportunity to leave without the need for further action and are offered assistance at every stage."