A Birmingham man is set to sue West Midlands Police after the force mistakenly put on a national police database that he had been guilty of actual bodily harm.
The force has offered Barry Pearson £500 in compensation for the mistake, which happened after a court case six years ago.
Mr Pearson, who has no criminal convictions, was released without charge from Warwick Crown Court in 1999 where he had appeared for an alleged offence of actual bodily harm.
West Midlands Police incorrectly typed into the Police National Computer database that Mr Pearson, from Wythall, Birmingham, had been found guilty.
The 48-year-old believes the force's blunder stopped him winning an eight-year court battle to allow his daughter from a previous marriage to live with him and cost him thousands of pounds in solicitors' fees.
He had suspected that there had been a mistake by the reaction he had had from the judge when he applied for his daughter to live with him. Mr Pearson found out about the error when he applied for his police records.
He said: "The compensation West Midlands Police has offered me is nothing but an insult. I have spent tens of thousands of pounds on a court battle that was doomed to fail because I was wrongly put down as having a criminal record.
"I'm absolutely disgusted. This mistake has made me look like a liar too. The judge asked me whether I had any convictions each time I appeared in court to apply for my daughter to live with me.
"I obviously said no and he must have looked at my records and thought of me as a liar which could not have helped my case.
"The error has had an effect on me in other ways too. I sincerely believe that I have been rejected by employers when applying for a new job because of it."
West Midlands Police admitted the error and amended it in August 2003.
Earlier this year, the force's legal assistant Gavin Dawson wrote a letter of apology to Mr Pearson.
In it he said: "It is quite clear that an inaccurate entry was placed on the Police National Computer in relation to those matters dealt with at Warwick Crown Court on 30 June 1999, i.e that you had been found guilty of an offence of assault occasioning actual bodily harm and bound over for 12 months.
"You will be aware that ... the entry was amended and corrected to show that you had been found not guilty.
"You will be aware that I have attempted to ascertain how this has come about, however due to the passage of time and the various audit procedures available I have not been able to do so.
"In the present circumstances and as a gesture of goodwill I can confirm that I am in receipt of instructions to make an ex-gratia payment to you in the sum of £500."
A spokesman from West Midlands Police said: "West Midlands Police has acknowledged the mistake. We have received no further representation from the individual in relation to this matter."