An article by controversial columnist Katie Hopkins which falsely claimed a Muslim family had links to al-Qaedahas resulted in a £150,000 ($185,000) fine for the Mail Online.
Hopkins has also been forced to apologise after she suggested that Mohammed Tariq Mahmood and his brother, Mohammed Zahid Mahmood were extremists after they were refused entry to the US while attempting to go on holiday to Disneyland.
The article, published on 23 December 2015, carried the headline: 'Just because Britain's border security is a Mickey Mouse operation you can't blame America for not letting this lot travel to Disneyland – I wouldn't either'.
Less than a week later, Hopkins published a follow-up comment piece in which she suggested that one of Tariq Mahmood's sons was responsible for a Facebook page which contained extremist material.
Mail Online and Hopkins have now apologised for the false claims they made in the articles and have paid the family "substantial damages" as well as their legal costs.
In a statement published online, the Mail Online said: "An article published in Katie Hopkins' column on 23 December 2015 ('Just because Britain's border security is a Mickey Mouse operation you can't blame America for not letting this lot travel to Disneyland – I wouldn't either') suggested that Mohammed Tariq Mahmood and his brother, Mohammed Zahid Mahmood, were extremists with links to Al Qaeda; that their purported reason for visiting the USA – namely to visit Disneyland – was a lie; and that US Homeland Security were right to prevent them from boarding their flight.
"We are happy to make clear that Tariq Mahmood and Zahid Mahmood are not extremists, nor do they have links to Al Qaeda. They were travelling to the USA with their families to see one of their brothers for a holiday in California and they had indeed planned to visit Disneyland as part of their trip.
"In addition a further article in Katie's column on 29 December ('A brave Muslim tried to warn us their week about the extremists taking over his community. What a tragedy it is that our PC politicians would rather not know') suggested that Hamza Mahmood (Mohammed Tariq Mahmood's son) was responsible for a Facebook page which allegedly contained extremist material.
"Our article included a photo of the family home. Hamza Mahmood has pointed out that he is not responsible for the Facebook page, which was linked to him as a result of an error involving his email address. We are happy to make clear that there is no suggestion that either Hamza nor Taeeba or Hafsa Mahmood (Hamza's mother and sister) have any links to extremism.
"We and Katie Hopkins apologise to the Mahmood family for the distress and embarrassment caused and have agreed to pay them substantial damages and their legal costs."
Hopkins was accused of attempting to hide her apology by tweeting a link to it at 2am in the morning UK time. The message has since been retweeted more than 6,000 times.
A previous article Hopkins wrote for the Sun newspaper in which she suggested using "gunships" to prevent migrants entering the UK and described them as "cockroaches" was recently deleted from the tabloid's website following a campaign from Stop Funding Hate pressure group.
In a statement, the Mahmood family stated: "We are very pleased that, after a great deal of dragging of their heels, the Mail and Ms Hopkins have now accepted that what they published was completely false.
"Even to this day the US authorities have not explained the reason why we were not permitted to travel; we assume it was an error or even a case of mistaken identity.
"However, matters are not helped when such sensationalist and, frankly, Islamophobic articles such as this are published, and which caused us all a great deal of distress and anxiety. We are very pleased that the record has been set straight."