A father's hopes for justice and compensation after he was falsely accused of rape could be shattered by yet another court battle.

Clive Bishop was on the brink of making legal history earlier this year when he managed to win the right to compensation for the trauma he suffered when a drunken woman made up an allegation of rape against him.

His life was left in tatters when police made a pre-dawn call to his house in the village of Walton, near Street, Somerset, in February 2007 and, in front of his wife, arrested him on allegations of rape.

After a series of court battles and appeals Mr Bishop finally won the right to compensation.

But now the Government wants to challenge that right in the High Court because the crime against him was not a "crime of violence".

It was months before the so-called victim, teenage mum Kirsty Palmer, of Pilton, admitted she had made the whole story up, in the face of overwhelming evidence collated by Mr Bishop.

In the months that followed the strain on Mr Bishop was so immense – including keeping the case a secret from work colleagues, family and friends so as not to prejudice police action against his false accuser – that he had to have counselling.

The case has cost him thousands of pounds, including police impounding his car and keeping the rear seats, and the loss of his second income.

But earlier this year Mr Bishop was delighted when he was told the Criminal Injuries Compensation Authority (CICA) decided, on appeal, that he did deserve financial compensation after his life was left in tatters by the allegations. At first CICA had rejected Mr Palmer's application, stating that he had not suffered from an actual physical attack.

But Mr Bishop was determined not to give up and took the case to appeal in May this year.

"The mental anguish that has been caused to me, and my wife, has been horrific and our lives will never be the same again," he said.

After CICA denied Mr Bishop compensation, he was helped by Victim Support to make another application, but that was also rejected.

"I went along to Street Citizen's Advice Bureau who were great and helped me to find a solicitor who was willing to make an appeal on my behalf to an appeal tribunal." The tribunal, held on the eve of Mr Bishop's 50th birthday, was hugely traumatic, said Mr Bishop, as he had to relive the circumstances again.

"I was shaking like a leaf throughout, just trembling," he said. But after hearing evidence, including from the leading detective on the case, the tribunal panel returned with the verdict they hoped would help Mr Bishop celebrate his birthday: that he was eligible for compensation.

But now Mr Bishop has been told by letter the Government is to fight that ruling.

"They are to apply for a Quashing Order in the High Court in London, to have my ruling overturned," he said.

"Among the claims they are making is that the crime against me was not a crime of violence and I was not in fear of any immediate danger.

"I wasn't expecting this. I thought the appeal in May would be it and I would eventually hear what compensation I would receive. Now it looks like we have to go through it all again. I suspect though this time I won't be asked to give evidence, that it will be more about the legal argument.

"Unfortunately this does prolong the whole case."