Mr Finn and Pallion Housing Ltd must pay the first part of the bill – £125,000 – within 28 days and were also hit with a final injunction, forbidding them from defaming gentoo chief executive Peter Walls.

In an order signed by Mr Justice Eady yesterday, Mr Finn and Pallion Housing are warned that if they disobey they may be held in contempt of court and imprisoned or fined.

Judgment was entered against Mr Finn and his company on the libel claims brought by Mr Walls and his damages will now be assessed at a later date, along with those payable by two other men involved in the website – John Baines and John Edward Smith.

Mr Finn and his company were also issued with an "interim injunction" banning them from defaming gentoo Group, or "pursuing a course which amounts to harassment" of Mr Walls and seven other named gentoo employees by publishing anonymous statements about them.

The three-day High Court case centred on the website which hosted comments about the Sunderland Housing Group, its chief executive, Peter Walls, and other employees.

The not-for-profit company, recently rebranded as gentoo Group, went to court over what it said were highly defamatory statements on the website and its "forum", including allegations of sexual misconduct, corruption and nepotism.

Sunderland Housing Group and Mr Walls, on behalf of other company employees, launched their legal action, claiming defamation, harassment and breaches of the Data Protection Act.

A judgment in default of defence was later entered against John Edward Smith, who was said to have acted as "a moderator" of the website's forum and also to have helped produce and distribute a newsletter claimed to contain defamatory material.

In December 2006, the defence of John Baines – also known as John Seafield and said to have played a leading role in the website and newsletter – was struck out and judgment was entered against him.

At the High Court this week, gentoo sought a top judge's ruling that Mr Finn and Pallion Housing Ltd were also "responsible" for the Dadsplace publications. Both denied the accusation.

However, Hugh Tomlinson, QC, told Mr Justice Eady on Wednesday that Mr Finn and Pallion "no longer contested the issue of responsibility" and were "content for judgment on the preliminary issue to be entered in favour of the claimants with the effect that they accept responsibility for the publication of the defamatory material by Dadsplace."

After yesterday's High Court hearing, Mr Walls, said: "This is part of a journey which has been going on for a long time and caused considerable anxiety to a lot of people. I am pleased to say that we're now vindicated."