The UK's Serious Fraud Office has agreed to pay property tycoon Robert Tchenguiz £1.5m in damages after legal proceeding against him and his brother collapsed due to lack of evidence.

The SFO compensated his brother, Vincent Tchenguiz, some £3m last week. The latest settlement also compensates R20 Limited and Rawlinson & Hunter Trustees.

The fraud office confirmed in a statement that the trial of the Iranian British property tycoons, scheduled to commence in October 2014, will now not take place.

"I am pleased that we have been able to resolve this final outstanding matter, without the need for a costly trial," said David Green, director of the SFO.

"As I said when Mr Vincent Tchenguiz accepted our offer last week, the SFO deeply regrets the errors for which we were criticised by the High Court in July 2012.

"On behalf of the SFO, I also apologise to Robert Tchenguiz for what happened to him. I reiterate that the SFO has changed a great deal since March 2011, and I am determined that the mistakes made over three years ago will not be repeated."

On 25 July, the SFO confirmed that it would pay Robert's brother, Vincent Tchenguiz, £3m (€3.8m, $5m) in damages and a further £3m to cover his legal costs, after he was arrested in March 2011.