An Asian police officer was allegedly threatened with the sack after complaining about the racist treatment of a colleague involving a toy monkey.
The Metropolitan Police officer, who has not been named, acted after seeing a monkey soft toy wearing a police uniform and with an ID badge placed on a black colleague's desk in their central London office.
The badge carried the initials "ERO" (evidential review officer), which was the same job title as the black officer.
The Asian officer raised his concerns on an internal complaints form to senior officers in 2013, but was consequently the subject of investigation amid allegations he concocted the story himself.
The BBC, which uncovered the case, said the officer was told he faced the prospect of being sacked.
It took two years for the complainant to be vindicated, when a Scotland Yard misconduct hearing found the whistleblower had not breached the standards of professional behaviour.
He later took the case to an employment tribunal, alleging he had been racially discriminated against and victimised.
The BBC reported that the Asian officer received a settlement of £35,000 before the case was heard in full.
Deputy Assistant Commissioner Richard Martin, who is in charge of professionalism at the Met, said in a statement: "Over the last two years the Met has made significant investment in improving how we handle complaints made by our own staff linked to discrimination, bullying or harassment.
"We are committed to a system which everyone can be confident in and a genuine belief that it has fairness.
"We have long recognised that people do have concern that they fear being victimised if they raise a complaint, regardless of whether that fear is justified.
"That has never been acceptable and we continue to make it very clear to our staff that victimisation will never be tolerated, that it will be investigated, and will have serious repercussions if it occurs.
"For the last 18 months the officer in charge of the Met's anti-corruption command personally oversaw the implementation of and now manages the new whistleblowing policy. This helps to give staff, who are graded as reporters of wrongdoing, confidence they can raise the most serious of issues and will receive support and protection.
"At the start of this year a new unit was formed within the Directorate of Professional Standards which has oversight of all complaints - be those internal or external - that include an allegation of discrimination.
"This is to ensure that there is independent scrutiny of how these allegations are investigated and to embed fairness within the process."
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