The Metropolitan Police has agreed a pay settlement with the family of murdered private investigator Daniel Morgan.

Scotland Yard has apologised and reportedly has paid relatives £2 million after it admitted the original murder investigation was “marred by a cycle of corruption, professional incompetence and defensiveness”.

Mr Morgan, who co-founded PI firm Southern investigations, was killed with an axe in the car park of the Golden Lion pub in Sydenham, south-east London, on March 10 1987.

Mr Morgan’s family had brought a civil claim against the Met and, the force said, after a mediation process they reached a “mutually satisfactory settlement of the proposed claims, including an admission of liability on behalf of the commissioner in respect of the conduct of his officers in response to the murder”.

The Met said the settlement terms were confidential but the Times reported early in the week the force had agreed a £2 million payout.

No further details of the agreement will be made public at the request of Mr Morgan’s family, the force added.

Met Police Commissioner Sir Mark Rowley said in a statement on Wednesday morning: “I unequivocally and unreservedly apologise for the failure of the Metropolitan Police Service to bring those responsible for the murder of Daniel Morgan to justice.

“From the earliest stages, his family have been repeatedly and inexcusably let down by the Metropolitan Police.

“This case has been marred by a cycle of corruption, professional incompetence and defensiveness that has repeated itself over and over again.”

The commissioner said the campaigning of Mr Morgan’s family “exposed” systemic failings in the organisation.

“I have met with the family and listened to vivid and moving accounts of the devastating impact those failings have had on their lives. 

“They have explained how their trust in policing has been eroded,” he added.