Basil Williams-Rigby, 57, and Michael Lawson, 62, a former police officer, had tearful reunions with their families as they emerged from the cells. They were severely critical of police methods.

The overturning of their convictions added to the controversy over Operation Care, one of the largest inquiries into alleged abuse in children’s homes. The seven-year investigation, run by Merseyside Police into 106 homes across five local authorities, is to end shortly after public criticism.

It came into the spotlight after the case against David Jones, the former Southampton Football Club manager, collapsed in December 2000 amid claims that witnesses fabricated allegations in an attempt to win compensation.

This cast doubt on the practice of “trawling” for victims — contacting former residents of care homes to elicit complaints dating back 20 years.

In all, 67 people were charged with abuse offences under Operation Care. There have been 36 convictions — 24 of which followed guilty pleas. There have been 11 acquittals, including the two men freed yesterday, and 22 cases were discontinued or dismissed by judges.

As Lord Justice Kennedy announced his decision, dozens of the pair’s supporters stood cheering and clapping.

Lord Justice Kennedy, Mr Justice Crane and Mr Justice McCombe had ruled that the convictions were “unsafe”.

Mr Williams-Rigby was sentenced to 12 years in 1999 after he was found guilty at Liverpool Crown Court of 18 charges of indecent assault, and one of a serious sexual assault, against four complainants.

Yesterday Mr Williams-Rigby said he was bitter at having been separated from his wife, Diane, and daughter, Rebecca, for so long but also said: “My feeling is one of exhilaration. It has been three years and seven months. I have counted the days.

“Our long march for freedom has finished. But we will be starting another long march to stop others being caught up by similar trawling operations. There are hundreds of innocent people in prison because of it. This method can never be justified.”

Asked about compensation he said: “Compensation is a dirty word. That is how I got here in the first place.”

Mr Lawson was jailed for seven years in June 2000 after he was found guilty at Liverpool Crown Court of 17 charges of indecent assault, involving six complainants, including one who gave evidence in the case against Mr Jones.

He said he felt aggrieved that he had missed seeing his grandchildren growing up. “I don’t feel bitter but feel sorry for those who have told lies; they have been tempted by the system,” Mr Lawson said.

New guidelines on police trawling were needed, he said. “Trawling is just touting for complaints when there is often no crime in the first place.”

During the appeal their lawyers argued that they had been convicted on the uncorroborated evidence of complainants, some of whom may have been motivated by possible compensation payouts.

Both men had worked at the same, unidentified, care home in Merseyside. They both pleaded innocence at their trials, but were convicted on the evidence of former residents, all of whom had criminal records. During their appeal hearing last month the court heard fresh evidence from three other former residents who cleared both men of doing anything wrong.

Last year a report by the Home Affairs Select Committee about this type of investigation said that “a new genre of miscarriages of justice” had arisen from “the over-enthusiastic pursuit” of abuse allegations in children’s homes. A Home Office reply is awaited.

Explore UK News

• Crime News

• Education News

• Health News

• Science News

• Scotland News

Times Recommends

• Looking for romance on the Blairs' love bus
• Children 'immersed in culture of violence'
• Hunt for black gold sweeps the country