The RAF gunner, who is only identified with his initial P was detained in a nursing home for up to 17 months.
"A defenceless 91-year-old gentleman in his final years of life was removed from his home and detained in a locked dementia unit," Judge Paul Mort was quoted by The Telegraph as saying.
"Had it not been for the alarm raised by his friend, he may have been condemned to remain there for the remainder of his days," he said.
Authorities in Essex agreed to pay him pounds 60,000 damages (USD 91,000)as well as more than pounds 50,000 in legal costs and will also cover the pounds 25,000 bill for keeping him in the nursing home.
The Authorities had also admitted breaching P's fundamental human rights to liberty and to respect for his home and family life.
P served his country as a RAF gunner during the war and had lived alone with Fluffy since the death of his sister in 1998.
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