The 55-year-old singer had denied four counts of indecently assaulting a girl in the early 1980s when she was under 16.

He also denied four charges of serious sexual assault against the same girl, who is now 34 and married with children.

After the verdict the Press Complaints Commission said it would investigate revelations that a newspaper paid the woman who made the allegations.

The court was told that the woman had taken �10,000 from the News of the World in exchange for her story and would receive �25,000 if the star was convicted.

Mr Justice Butterfield had branded the pay-out "highly reprehensible". He said: "It is not illegal but it is to be greatly deprecated."

Glitter thanks jury

Gary Glitter smiled as the verdict was greeted by cheers in the public gallery. He turned to the jury, put his hands together and said "thank you". The acquittal ended four days of evidence at Bristol Crown Court.

About 100 fans of the singer had gathered outside the court to show their support.

Following the jury's decision, the judge adjourned the hearing and told the court: "There is another indictment concerning 54 counts of making indecent photographs. We will deal with that this afternoon."

The besotted fan, who is now 34 and a mother-of-three, made her allegations after reading about the star's arrest in 1997 at the computer store PC World in Bristol. He was charged with having child pornography on his computer.

On stage

She told the News of the World that she had met the artist at the age of 14 when he invited her on stage and she sang a song with him.

The woman claimed that the friendship, which was encouraged by her parents, developed into a sexual relationship.

The jury was told that during their stormy relationship the star convinced her he was serious about their affair and would threaten suicide if the woman tried to end it.

The woman told the court that she went to the News of the World in 1993 to "get him to leave me alone". She received �10,000 for revealing that he was "bald and a wig-wearer".