On Thursday, Justice Ian Harrison ordered the State of NSW to pay that amount plus interest after Mr Spedding alleged police maliciously pursued him while investigating the disappearance of the three-year-old in September 2014.

His case in the NSW Supreme Court sought compensation for reputational harm and psychological treatment.

He also sought exemplary damages to punish police for purportedly using the courts for an improper purpose.

The tradesman was an early high-profile suspect in the disappearance of three-year-old William from a home on the NSW mid-north coast.

Police searched Mr Spedding’s Bonny Hills home and drained his septic tank in January 2015 but found no evidence linking him to William.

Before being categorically ruled out in both investigations, the tradesman was charged in April 2015 over the historical child abuse claims, spending 56 days in custody and then being released on strict bail conditions.

Mr Spedding’s lawyers claimed a police investigation prior to charging was “done in extreme haste” in three or four weeks.

“The investigation was not in any way professional, careful or proper,” said Mr Spedding’s lawyer Adrian Canceri during closing submissions in August.

Mr Spedding has claimed the anxiety and depression he suffers were caused by the prosecution and the public attention it brought.

Clear evidence emerged that the complainants had been coached by another person to make allegations and another person’s evidence undermined the case, Justice Harrison heard.

The charges were later dropped by prosecutors.

Barrister Adrian Williams, for the State of NSW, said misunderstandings occurred but it didn’t follow that police were acting maliciously.