DESPITE years of appalling sexual abuse a young man suffered at a North-East children's home, he is not entitled to a penny in compensation, appeal court judges ruled yesterday.

The man, now in his 30s and named only as X for legal reasons, has been left mentally scarred by his five-year ordeal at Saltergill Special School, in Kirklevington, Yarm, near Stockton.

While there, he suffered "frequent and serious" abuse - including rape - by school worker Myles Brady who used "devious and manipulative" techniques common to paedophiles.

In 1988, Brady was acquitted at Teesside Crown Court of molesting X, but was later convicted of other sex abuse crimes in Ireland after returning to his homeland. He was jailed for abusing children at St Joseph's Orphanage, in Kilkenny, between 1976 and 1977, and died in prison in 1999.

In May this year, Judge Paul Collins accepted Brady had been unjustly acquitted at Teesside Crown Court and that X's harrowing sex abuse allegations were true.

X, who had suffered a deeply disturbed childhood and had been in the care system since the age of two, lived at Saltergill for six years in the 1980s.

He said Brady had such a hold over him that the abuse had continued even after he left the school. Brady even "introduced him to prostitution".

X, who now lives in Brighton, sued Middlesbrough Council - whose predecessors ran Saltergill, but had his compensation claim dismissed by Judge Collins, whose ruling was yesterday confirmed by the Court of Appeal.

Lord Justice Latham said there was no way the Appeal Court could interfere with Judge Collins' conclusion that the danger posed by Brady only became apparent in hindsight and that the council could not be blamed.

The council had not failed in the duty of care it owed X, ruled the appeal judge.

Brady came with glowing references and always had an innocent explanation for any visits.

In his ruling in May, Judge Collins said X had given a graphic and harrowing account of the abuse he suffered and, had he won his case, he would have been due more than £100,000 for psychiatric damage and lost earnings.