GlaxoSmithKline, the UK's largest drug maker, tricked and bribed doctors into prescribing children with dangerous antidepressants, it was revealed last night.

The company will pay $3bn (£1.9bn) to settle a slew of charges in the US after admitting a multi-year criminal scheme to hide unhelpful scientific evidence, manipulate articles in medical journals and lavish gifts on sympathetic doctors.

The drug at the centre of the scheme, the blockbuster pill Paxil, which is branded Seroxat in Britain, has since been banned for use by children because it can make them suicidal.

Download the new Independent Premium app Sharing the full story, not just the headlines

Company managers, all the way up to GSK's chief executive, Sir Andrew Witty, will have their pay and bonuses clawed back if there is any further wrongdoing, under the terms of a wide-ranging settlement with the Department of Justice.

GSK admitted illegally marketing several of its drugs for uses that had not been approved by safety regulators, and documents released by the Justice Department detailed the luxurious conferences in exotic climes where paid-for scientific speakers hyped up the conclusions of dubious academic papers.

GSK held eight "Paxil forum" events in Puerto Rico, Hawaii and California, where hundreds of doctors were treated to snorkelling, horse-riding, sailing, deep-sea fishing, balloon rides and spa treatments, and given an "honorarium" of $750 in cash. The company knew it was worth paying for these kinds of boondoggles; it monitored the doctors who attended and found they significantly increased prescriptions of Paxil in the months after the event.

Paxil, once GSK's best-selling drug, was never approved for use by children but because doctors were free to use their discretion, the company had a strong incentive to steer the medical profession to scientific studies that suggested it might be helpful to under-18s diagnosed with depression. Those studies were paid for by GSK itself. Sales reps for Paxil even called on paediatricians to highlight the studies.

The company pleaded guilty to criminal charges related to the marketing of Paxil for use by children between 1999 and 2003, when it:

* failed to reveal the existence of two scientific studies that showed the drug was ineffective in treating childhood depression;

* cut out important caveats to the conclusion of a third study which suggested it may improve a small number of symptoms in children;

Daily coronavirus briefing No hype, just the advice and analysis you need Enter your email address Continue Continue Please enter an email address Email address is invalid Fill out this field Email address is invalid Email already exists. Log in to update your newsletter preferences Register with your social account or click here to log in I would like to receive morning headlines Monday - Friday plus breaking news alerts by email Update newsletter preferences

* over-hyped the conclusions of that study, after it was published, in marketing materials at conferences and distributed to doctors.

GSK also illegally promoted Wellbutrin, another antidepressant, for the treatment of adult impotence, obesity and attention deficit, according to its guilty plea yesterday.

James Cole, US Deputy Attorney General, said: "We are determined to stop practices that jeopardise patients' health, harm taxpayers and violate the public trust – and this historic action is a clear warning to any company that chooses to break the law."

The settlement – $1bn in criminal fines, $2bn in civil penalties – also resolved claims that GSK billed government-run healthcare plans too much for many drugs.

"Whilst these originate in a different era for the company, they cannot and will not be ignored," Sir Andrew said. "On behalf of GSK, I want to express our regret and reiterate that we have learnt from the mistakes that were made."

GSK had already set aside more than $3bn to cover the costs of the settlement, and its shares rose 1.75 per cent yesterday, more than the overall market, to reflect the end of a period of uncertainty.

The company will submit to a "corporate integrity agreement" with the US government that involves a shake-up of its remuneration plan for senior managers and executives, and reflects changes already made to sales practices. The 100 top managers in the US business and the executive board will have to set aside a portion of their annual pay for three years in case they are found to be complicit in future wrongdoing, and the company will be able to claw back up to three times their annual bonus and long-term incentive pay.

Danger Drug: suicides linked to antidepressants

Sara Carlin, 18, was a talented student who dreamt of becoming a doctor, only for her to take her own life back in 2007, a little over a year after being prescribed anti-depressants. She was found hanging in the basement of her family home in Oakville, Canada.

The country's health authorities put out warnings in 2003 and 2004 that prescribing newer antidepressants such as Paxil to teenagers could lead to behavioural changes and self-harm, but Sara brushed off her mother's attempts to warn her off such drugs, saying her doctor had said they would lift her mood.

Colin Whitfield, 56, died just two weeks after he began taking the antidepressant drug Seroxat. The retired Welsh teacher was found in the garden shed of the family home having slit his own wrists in 2002.

At the inquest the coroner said that he had "grave concerns that this is a dangerous drug that should be withdrawn until detailed national studies are undertaken."

Kathryn, Colin's wife of more than 30 years, said that she had noticed a profound change in her husband's behaviour once he started taking Seroxat, and the drug may have contributed to his unexpected suicide. "It didn't fit the picture of who he was and we have no doubt that it was the drug that caused him to do it. He was a very caring, very protective father," she said.