The council has agreed to the ombudsman's recommendation that it should pay 1,000 to the girl's father, who claimed the council had failed to investigate or act following referrals made by him and other agencies.
It must also pay the girl 7,000 compensation, which is to be held in a trust on her behalf.
The father first contacted Manchester's social services department in December 1996 after arriving at the home of his former partner, the girl's mother, to find it in a filthy condition. But it wasn't until January 1999 - and after several other referrals from the father and other agencies - that the girl, "Louise", was removed from her mother's care.
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