Melbourne teacher Annette Toohey says Victoria Police must launch an immediate investigation into the circumstances that led to her sister Josephine Greensill being wrongly jailed for nearly two-and-a-half years.

"It's outrageous that my sister was jailed," Ms Toohey told the ABC's Australian Story.

"And it's outrageous that since her acquittal there has been no apology for what has happened to her, no-one has been held to account. We want a full investigation into this and we won't stop until we get that."

Ms Greensill, a retired teacher, was 59 years old when she went to prison after two men accused her of child sexual abuse, including full intercourse when they were eight years old and she was their year 3 teacher.

From the outset, Ms Greensill protested her innocence.

But in June 2010 a jury found her guilty of nine of 20 charges, all relating to an alleged incident in a tent in her backyard.

Top criminal lawyer investigates

Criminal lawyer Robert Stary, who took on the case a year after Ms Greensill's conviction, said in 30 years of practice it was very rare for him to be so strident about a person's innocence.

"Right from the very outset, we thought that there was something untoward about that conviction," he said.

For Mr Stary, much of the evidence in the case "didn't stack up".

"The thing that struck me most is the complete implausibility of the allegations," he said.

"The fact that they as prepubescent children claim to have had firstly penile sexual intercourse with Josephine and then in their account describing how they've ejaculated.

"Their description of the events really beggars belief."

Ms Greensill said she would have languished in prison for much longer had it not been for the dedication and persistence of Mr Stary and her family.

All convictions quashed

In a unanimous appeal decision in November 2012, three Supreme Court judges acquitted Ms Greensill and quashed all convictions.

Annette Toohey (left) Josephine Greensill and Mary Toohey (right) offered Josephine valuable support ( Stavros Sakellaris )

"They were incredulous as to the nature of the evidence and the conviction," Mr Stary said of the judges' decision.

The judges gave nine reasons for their decision, including "a real likelihood" the two complainants had collaborated and "a real possibility of concoction".

They also cited considerable inconsistency in the evidence of the men, a lack of medical and forensic evidence, and a possible financial motive relating to the prospect of compensation.

"When I left jail, I was 61 and I'd served two years, five months and 13 days," Ms Greensill said.

The toll on her health has been substantial, both physically and mentally, and she has been diagnosed with post-traumatic stress disorder.

"One of the most distressing things about the time in jail was that I missed important family events, like my aunty's 90th, a few 60ths that I missed, including my own 60th birthday," she said.

"I had three grandchildren born.

"And one of my sisters got breast cancer and I wasn't there to support her, and sadly my son-in-law passed away and I wasn't allowed to go to the funeral – no reason [given], just 'no, you can't go'.

"It was really tough knowing that all these things were happening, really important things in my life, as I love my family, and that I couldn't participate in them."

Mr Stary said it was unacceptable there were no consequences for those responsible for what happened to Ms Greensill.

Police consider further investigation

Victoria Police said a Special Crime Investigation unit was considering whether to investigate the men who made the allegations in relation to possible perjury, perverting the course of justice and conspiracy.

Josephine Greensill has been diagnosed with post traumatic stress disorder ( Stavros Sakellaris )

But Ms Toohey is angry she and her sister have heard nothing from the police since January.

"We want something to happen," Ms Toohey said.

"This has been a dreadful miscarriage of justice and she deserves to have justice."

Victoria Police told the ABC the special investigator's "review is ongoing".

Australian Story spoke with the first complainant who declined an on-camera interview and the second complainant did not respond to the program's inquiries.

Government rejects compensation claim

In the seven years since the allegations emerged, Ms Greensill has not been arrested or charged with any other offences.

Ms Greensill said she has spent well in excess of $200,000 to defend herself since the case began.

Victorian Attorney-General Martin Pakula rejected an application for an ex gratia payment to compensate her for what happened, saying her case did not fit the criteria of suffering a financial loss or other detriment directly as a result of the workings of government.

No other form of government compensation is open to Ms Greensill.

A leading Melbourne QC is understood to be currently assessing this decision.

Mr Stary believes the Victorian Government should be accepting responsibility.

"In light of what the Court of Appeal has said, this case should never have gone before a jury," he said.

Ms Greensill's family said their experience of the judicial system was a warning to others.

"She was innocent," Ms Toohey said. "If it could happen to her, it could happen to anybody."