A PANEL of child experts who wrongly accused two nursery nurses of sexual abuse yesterday conceded they will not appeal against a libel action they lost.

In July, Mr Justice Eady ordered the four authors of a council-funded report to pay Dawn Reed, 31, and Christopher Lillie, 37, £200,000 each in damages.

After the judgment, the team said it intended to appeal if it secured the backing of Newcastle City Council, which paid them to review allegations of abuse at a local authority nursery.

But yesterday, the council announced that no more public money would be spent on the case. It has already agreed to pay the libel damages on behalf of the review team and total costs of the case could rise to £4m.

In 1998, the review team produced a report which falsely accused the pair of child abuse, even though they had been acquitted on the direction of a judge.

Mr Justice Eady found the review team - Dr Richard Barker, a social worker in an academic post at Northumbria University; Roy Wardell, a former director of social services for Barnsley Metropolitan Borough Council; Jacqui Saradjian, a clinical psychologist; and Judith Jones, a senior social worker - had been "malicious" in their intent while writing the report.