Updated

The New Zealand government on Tuesday agreed to pay more than half a million dollars to a man who spent 12 years in jail after he was convicted of killing five members of his own family but was later found not guilty at a retrial.

The David Bain case has proved to be one of the most notorious and divisive in the South Pacific nation's history.

Justice Minister Amy Adams said the payment of 925,000 New Zealand dollars ($664,000) to Bain didn't represent compensation. That was because, she said, a report found Bain had not proved his innocence despite being acquitted on all five murder charges.

Adams said the payment instead was to recognize the amount of time and money Bain had spent seeking compensation, to avoid further litigation, and to finally bring the case to a conclusion.

"This case has been one of the most complex, unique and high-profile cases New Zealand has ever known," Adams told a news conference. She said Bain had accepted the payment as a full and final settlement.

Bain's lawyer was not immediately available for comment. Bain, 44, told The New Zealand Herald newspaper that Adams and the others were wrong about him: "I am innocent," he said.

The case began in 1994 when Bain's mother, father and three siblings were found shot to death.

Police quickly concluded there were only two suspects: David Bain and father Robin Bain, who some suspected of committing murder-suicide. The question of whether it was the father or son remained central to the case and clouded it for years to come.

David Bain was convicted of the murders in 1995. But 12 years later, the final court of appeal, the Privy Council, quashed the convictions and ordered a retrial. Bain was released on bail and in 2009 was found not guilty after a 3-month retrial.

Bain has been seeking compensation for wrongful conviction and imprisonment for more than six years.

But a government-commissioned report this year concluded that, despite Bain's acquittal, he had not proved his innocence "on the balance of probabilities."

"While the issue has divided opinion in New Zealand, I am satisfied that the matter has at least now been concluded," said Adams, the justice minister.