The Daily Mail is to pay "substantial" damages to Italian footballer Marco Materazzi for alleging that it was "vile racist abuse" that had provoked French captain Zinedine Zidane to headbutt him in the 2006 World Cup final.

Materazzi, the Inter Milan player who scored Italy's equalising goal and one of the winning penalties in the match in Berlin, launched the action after the Mail published a series of articles speculating that he had called Zidane "the son of a terrorist whore".

The claims were made over a series of days, including a front page story under the headline "Revealed: The insult that made Zidane see red" and others headlined "The slur on his mother that made Zidane lose his head" and "Team mates back Zidane as Italian insult is revealed".

As newspapers employed slow motion replays and an army of lip reading experts to try and decode why Zidane had exploded in such spectacular fashion with just 10 minutes of the game remaining, a range of claims were made about what was said to the French player.

Following the match, Materazzi admitted insulting Zidane but denied racially abusing him, calling him a "terrorist" or insulting his mother.

Zidane told Canal Plus that Materazzi had said "very personal things". He said: "I tried not to listen but he kept repeating the words."

In his autobiography, published only in Italian, Materazzi later gave his own full account of the incident in which he said he was incensed by Zidane's "arrogant" attitude after he had pulled the player's shirt.

He wrote: "Immediately after this, Zidane pulled his own shirt and again said words to the effect 'Se vuoi la mia maglietta te la do dopo' ('If you would like my shirt, I will give it to you after the game').

"Zidane looked at me and said these words to me in a condescending fashion, implying that I was not worthy of having his shirt. Because I was annoyed by his arrogance, I replied 'Preferisco la puttana di tua sorella' ('I would rather have your whore of a sister')."

He added: "In my experience, what I said to Zidane is similar to the sort of thing that is said by footballers on football pitches all around the world - slightly rude and offensive banter. I certainly did not expect the extreme reaction that I then had from Zidane, which was out of all proportion to anything which I had said."

Materazzi has already won apologies and damages from the Sun and the Daily Star over similar claims of racism, although the level of damages that the former will pay has still to be set.

The Mail will also be forced to publish an apology in tomorrow's newspaper.

"The Daily Mail now accepts that the allegations are wholly untrue and there is no question of Marco Materazzi having said anything of a racist nature to Zidane," said the Italian player's lawyer, Steven Heffer of Collyer Bristow.

A five-day trial had been due to start last month but a few days before it was due to commence, the Mail capitulated.

Jonathan Price, acting for the title's publisher Associated Newspapers, said that it offered its apologies for the distress and embarrassment caused, and had agreed to pay Materazzi substantial damages and his costs.

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