The 33-year-old officer - who has been known only by her cover name of Lizzie James - has left the Metropolitan Police on health grounds following her "traumatic" role in the investigation of Miss Nickell's death.

Court rejects undercover evidence

Officers heading the inquiry into Miss Nickell's murder on Wimbledon Common, south-west London, in 1992 got Lizzie to befriend the main suspect, Colin Stagg, in a bid to gain evidence.

The detective constable posed as a disturbed woman looking for someone to share her sexual fantasies.

Conversations and correspondence between Lizzie and Mr Stagg formed the basis of the prosecution case when he went on trial at the Old Bailey four years ago.

Colin Stagg was acquitted of the murder

But the prosecution collapsed when trial judge Mr Justice Ognall described evidence gathered in the operation as "thoroughly reprehensible" and ruled that it was inadmissible.

Mr Stagg, who had consistently and strenuously denied any connection with Miss Nickell's murder, was acquitted.

Lizzie, who has served 13 years in the Metropolitan Police, including time with Scotland Yard's SO10 covert operations squad, continued to work following the Nickell investigation. However, she has been on sick leave for the past 18 months.

Fellow officers have claimed she never recovered from the trauma she suffered during her harrowing work on the Nickell inquiry, which was ultimately perceived as a failure.

Compensation claim

The Police Federation plans to sue Scotland Yard for compensation for Lizzie.

A Metropolitan Police Federation spokesman said: "The officer concerned has taken early retirement due to the trauma she suffered as a result of the role she played in the Nickell investigation.

"We are pursuing a civil claim against the Metropolitan Police Commissioner on the grounds that she was not offered sufficient support in dealing with the difficult experiences she went through."

The civil claim alleges that the officer was not offered leave or professional support following her undercover role and had suffered emotional problems as a result.

A Scotland Yard spokesman declined to discuss the case, saying: "We are unable to discuss issues surrounding individual officers or their covert operations."