Simona Bonomo, in 2009, talks about the footage of her encounter with police. guardian.co.uk

An Italian student has won an out-of-court settlement with police after she was stopped under anti-terrorist legislation while filming buildings in London, and later arrested, held in a cell for five hours and then fined.

Simona Bonomo filmed the moment she was approached by two police community support officers (PCSOs) in Paddington, west London, and later gave the footage to the Guardian.

The video, which went viral, showed one of the officers – PSCO Thomas Cooke – question the art student about why she was filming buildings "iconic to us" and demand to see images on her camera. In doing so he claimed to have powers that he did not have.

He and another PCSO then departed, only to return with other police officers who accused Bonomo, 34, of being aggressive. She was bundled to the ground and arrested.

After five hours in a cell, Bonomo was told to sign an £80 fixed penalty notice for causing "harassment, alarm and distress". In court, Bonomo was found not guilty of any offence and the Crown Prosecution Service said it was unclear why she had even been arrested.

Soon after the incident in November 2009, Bonomo began legal action against the Metropolitan police and lodged a complaint against the officers involved. The case was due to be heard at the high court, but the Met recently settled with her solicitor Beth Handley, from Hickman and Rose, agreeing to pay the student a considerable sum. The force did not accept liability and refused to apologise.

"I am pleased with the settlement but money alone does not erase what happened and I am left with consternation that the systems in place to protect citizens from police brutality do not work," Bonomo said.

Bonomo is particularly concerned about the handling of her complaint by the acting inspector David Pascoe, from the Met's department of professional standards. He decided Bonomo had no grounds for complaint without even interviewing any of the officers involved.

The Met has now been asked to reinvestigate the complaint by the Independent Police Complaints Commission, which upheld an appeal from Bonomo. The IPCC said Bonomo had lodged a "serious complaint" that had become part of the "global discourse on policing" after the video "became viral and has attracted national and international criticism".

The watchdog listed a number of lines of inquiry it said had been neglected by the investigating officer.

The Met said it was now reinvestigating Bonomo's complaint.