The reporter who took on the 'News of the World' and won

There is still a trace of admiration in Matt Driscoll's voice as he talks about the News of the World over a dry Sauvignon in a bar just over the river from Wapping. "If you end up at the News of the World, it's normally because you're the best at whatever you do," he says, "It was my dream job." Little did he know when he joined the Sunday tabloid as a sports reporter 12 years ago that achieving his ultimate goal would leave such an impression on his health and, eventually, his bank balance.

Last Monday, a tribunal ordered the News of the World to pay Driscoll, 41, £792,736 in compensation for being the victim of "a consistent pattern of bullying behaviour", led by the paper's then editor, Andy Coulson. The size of the payout has astonished many in the industry and is thought to be the biggest settlement of its kind in the media.

It is a fresh blow for Coulson, who as David Cameron's director of communications has been responsible for rebranding the Conservative party with a softer image.

Driscoll described to the tribunal how, having taken against him, Coulson orchestrated a campaign to get him removed from the paper "as quickly and as cheaply as possible." "Overnight Coulson decided I was a bad journalist, and that was it. A tabloid newspaper office is like a mini totalitarian state, where an editor can decide anything, and nobody challenges it."

It all began when Driscoll failed to stand up a tip given to him by Coulson about plans for Arsenal to play in a special claret-coloured strip to mark the club's 100th birthday. When Driscoll put the story to Arsenal, a spokesman dismissed it as nonsense, and he let it drop. A few months later the story appeared in The Sun after which "Coulson was on the war path".

Until then, Driscoll's career had advanced steadily. Having left school to become a sports reporter on the Kent and Sussex Courier, he spent 11 years at the Daily Star before being headhunted by the News of the World in 1997. He joined as northern football reporter under Phil Hall, with whom he got on well, and was promoted. He continued to flourish under Rebekah Wade, and was given a pay rise under Coulson, who became editor in 2003.

After the Arsenal story, Driscoll was placed under intense investigation every time a story gave rise to a complaint - however routine - from its subject. These led Driscoll to suffer anxiety attacks, which culminated in July 2006, the day after his birthday, with him being admitted to hospital with a suspected heart attack. "I was used to such high levels of stress. On a big match, when I'm working live on a game, I could handle any kind of deadline thrown at me. But maybe I was so used to being at that level that I was tipped over the edge."

The day after his hospital scare, Coulson sent an email to executives saying he wanted Driscoll out. "They sensed this was the time that I had cracked". While Driscoll lay at home for three months recovering, he was bombarded with phone calls and emails demanding he come into the office.

"I was getting three or four phone calls, emails and recorded delivery letters every day from the managing editor. They even sent a nurse."

During this time Driscoll suffered chest pains and sleep loss and was prescribed valium and sleeping pills. "It was like being under siege. They asked for my company car back. They cut off my company mobile, which meant I lost all my contacts. And they cut off my salary on two occasions, which they called "a broadside".

News International put up a strong defence, calling six witnesses, "all saying what a terrible journalist I was," including Driscoll's sports editor, Mike Dunn. "He was later found to have exaggerated loads of things. It's sad because he had to do it for his bosses." The thrust of the defence was that Driscoll had deteriorated as a journalist, a case undermined by his successive promotions.

Now, more than three years after his first chest pains, Driscoll is glad to have gained closure. Since the tribunal found in his favour last December, the News of the World has twice challenged it, delaying Monday's settlement. In theory, the paper could appeal again, but in his final statement the judge warned that if it were to do so he would re-appraise the sum.

The award was calculated on loss of earnings - his salarywas £65,000- and projected future earnings over 12 years. Driscoll says the most he could now hope to earn as a freelance is £35,000, but he would like to return to journalism. "Why should I turn my back on the career I spent 20 years building because of the whim of Andy Coulson? If I do that they've won. I have to prove they can't end my career. That's going to drive me forwards."