has picked up thousands of dollars in back pay.

He had been recommended for the promotion in 1995 but then Commissioner Colin Coxall withdrew the recommendation after making undisclosed allegations against Mr. Smith.

Ch. Insp. Smith's lawyer, Julian Hall then claimed the demotion was part of racist agenda to promote white officers over black officers.

And he complained that Ch. Insp. Smith had never been given the chance to defend himself against the allegations which were in breach of natural justice.

Earlier in 1995, Police had investigated a complaint over an alleged spitting incident when Ch. Insp. Smith was playing football while off duty.

He had also hit the headlines when he criticised the decision to hire two overseas officers to head Bermuda's Police force.

He had said: "I don't think we need someone to come here and tell us how to suck eggs.'' Ch. Insp. Smith could not be reached for comment last night, but VSB radio claimed the settlement could be worth around $200,000.