A Cabinet minister has paid damages to an academic after suggesting she had expressed sympathy for Hamas, with the costs covered by taxpayers.

Michelle Donelan, the Science Secretary, retracted her comments about Professor Kate Sang and agreed to pay her an undisclosed sum on Tuesday, saying there was “no evidence” that the academic was a Hamas supporter.

It is understood taxpayers covered the sum paid to Prof Sang and that it was handed over in an effort to reduce the costs that could result from protracted legal action.

Labour demanded to know how much taxpayers’ money was spent and called Ms Donelan’s false allegations against the academics a “new low in government standards”, while the Liberal Democrats called for a Cabinet Office inquiry.

The minister had tweeted a letter she had written to UK Research and Innovation (UKRI) in October, expressing “disgust and outrage” that Prof Sang and another academic, Dr Kamna Patel, had “shared extremist views” and, in Prof Sang’s case, expressed sympathy for the terrorist group after the October 7 attacks in Israel.

The letter followed a tweet by Prof Sang saying “this is disturbing”, and containing a link to an article by the Guardian describing the response to the Hamas attacks in the UK, while Dr Patel had retweeted a post describing Israeli actions as “genocide and apartheid”.

Both academics had recently been appointed to UKRI’s advisory group on equality, diversity and inclusion.

Ms Donelan said they should be removed from their posts as they “appear to have contravened the Nolan principles of public life”.

As a result, both Prof Sang and Dr Patel were subject to an investigation by UKRI, which uncovered no evidence that they had expressed extremist views or support for Hamas, or breached the terms of their appointments.

In a statement on Tuesday, Ms Donelan accepted that Prof Sang’s comments referred to the Guardian story as a whole, and not just the headline, which focused on the Government’s crackdown on support for Hamas.

She said: “I am grateful for Professor Sang’s clarification, and I am pleased to be able to withdraw my original concerns in relation to this specific tweet.

“I will make this clear to UKRI which has also now concluded that there is no evidence of any breach of the Nolan principles or failings in the appointment process to the EDI board.

Michelle Donelan made a cheap political point at my expense and caused serious damage to my reputation. I propose to donate part of the damages she has paid to a charity

“As I said to the media at the time, and I want to reiterate now: I have never thought or claimed that Professor Sang, or any member of the board, committed a criminal offence.

“I fully accept that she is not an extremist, a supporter of Hamas or any other proscribed organisation and I note that an independent investigation has concluded that there is no evidence that she is. I have deleted my original post to my X account.”

Prof Sang said: “I am delighted that this matter has now concluded, but very disturbed by the way in which Michelle Donelan and UKRI behaved.

“Had they asked me at the start, I would have explained the true position. Instead, Michelle Donelan made a cheap political point at my expense and caused serious damage to my reputation. I propose to donate part of the damages she has paid to a charity.”

Dr Patel described the experience as “distressing”, saying she was “glad” the process had concluded.

She said: “There was never any need for UKRI to investigate as it should have been obvious from the start that we had not breached the Nolan principles or expressed extremist views.

“Worryingly, it appears UKRI were steered by who made the claim and not its substance.”

A Government source said the Prime Minister has “full confidence” in “excellent minister” Ms Donelan.

The University and College Union (UCU) criticised Ms Donelan for her “outrageous attack on academic freedom”.

UCU general secretary Jo Grady said: “This investigation completely exonerates our members and confirms Michelle Donelan’s unprecedented, politicised intervention was an outrageous attack on academic freedom.

“This whole affair has had a chilling effect on university campuses and exposes the lie that hard-right Tory ministers are the supposed guardians of free speech.

“Donelan must now apologise for throwing the careers of highly respected academics into turmoil for the sake of another Tory anti-woke headline.”

Accusing researchers of sharing extremist material and sympathising with a proscribed group, without any proof, is a new low in government standards

Shadow science secretary Peter Kyle said: “The Secretary of State must prove she still has the confidence of the research community after using her department to make false allegations against academics.

“Accusing researchers of sharing extremist material and sympathising with a proscribed group, without any proof, is a new low in government standards.

“A Labour government would focus on actually delivering for our world-class scientists and research institutions, who will be a key part of our mission-led government.”

Lib Dem deputy leader Daisy Cooper said: “The public will be shocked to read reports that Michelle Donelan’s department may have used taxpayer funds to cover her damages and legal costs in this case.

“People deserve answers and not yet another Conservative cover-up. A Cabinet Office inquiry is urgently needed to get to the bottom of exactly what happened, whether any rules were broken and how much public money was spent.”

Law firm Bindmans, which represented Prof Sang in her libel complaint, also criticised the think tank Policy Exchange for putting out what it described as a “seriously misleading press release” about the academics’ comments.

Tamsin Allen, a partner at Bindmans, said: “It is extraordinary that a minister should be guided by a lobby group into making serious false allegations about private citizens without doing the first piece of due diligence.”

Policy Exchange has been contacted for comment.