The SNP health secretary and his wife Nadia El-Nakla, who is also a nationalist councillor, have dropped legal action against their local nursery named Little Scholars.
They have dropped their £30,000 legal case against a Scottish nursery they claimed racially discriminated against them.
The pair launched a high-profile court case against Little Scholars Day Nursery in Broughty Ferry in Dundee after they collaborated with the Daily Record into an undercover investigation into it.
They worked with the paper to submit a number of false applications after being told there was no space for their daughter.
They alleged that the nursery responded to fake inquiries from parents with “non-ethnic” names, saying spaces were available.
Little Scholars have always denied wrongdoing and vowed to fight back against the couple if the case went to court. However, it has been revealed that the case has been dropped.
The owner of the nursery has revealed that she feels “vindicated” by the result as they were always adamant that they had been falsely accused.
A Care Inspectorate report into the incident found that the nursery had not discriminated against the couple. They did say: “We have upheld a complaint in relation to this matter. We found that the service did not promote fairness, equality and respect when offering placements.”
Usha Fowdar, owner of the nursery, said: “Whilst we were 100% prepared to see Ms El-Nakla in court, we are extremely pleased this baseless legal action has been terminated.
“It bears repeating that, despite some extremely misleading headlines and spurious allegations, the Care Inspectorate identified administrative processes for improvement which had nothing to do with discrimination, because there never was any discrimination. Any attempt to twist this fact should be called out for what it is.”
Ms Fowdar added: “While I’m pleased our employees will be spared the stress of appearing as witnesses, in one sense I’m also disappointed, as the court case would have been extremely revealing and I’m utterly confident we would have prevailed.
“Despite this vindication, it has been deeply upsetting to have spent almost 18 months and tens of thousands of pounds defending our small nursery against their false claims.
“It beggars belief that, rather than pick up the phone to quickly resolve what was a simple misunderstanding, they colluded in a half-baked sting operation and then mounted a vicious and cynical campaign against us in the national media.”
Mr Yousaf and his wife claimed both groups had come to an agreement and it was not the case that they had just “terminated” the case.