The creator of the video game Grand Theft Auto has accepted substantial undisclosed libel damages over an "entirely false" story that it was planning a version based on gunman Raoul Moat.
Take 2 Inc (Rockstar Games) had brought High Court proceedings over an article and leader in The Daily Star in July.
Its solicitor, Melanie Hart, told Mr Justice Tugendhat in London that the story claimed that the new game - Grand Theft Auto Rothbury - would be based on the tragedy which culminated in the events in the Northumberland village.
She said that the newspaper solicited and published quotes from third parties, including one from a grieving relative of a victim of Moat, in which the alleged plan to create such a game was described as "sick" and deplored in the strongest terms.
In the leader, the newspaper commented that the people behind the production of the game were "questionable idiots" who were making money out of other people's misery.
Ms Hart said that Express Newspapers admitted that it did not approach the company for a comment before publication.
"The defendant now accepts that Rockstar Games never had any intention to create such a video game at any time. The story was entirely false."
She added that the newspaper had agreed to pay substantial damages and the company's legal costs.
Clare Kissin, for Express Newspapers, said it accepted that the allegations were untrue and apologised for the upset and damage caused.