Blues rookie Jamie Tandy made a civil claim for damages against Barton, who assaulted the youngster at City's Christmas party in 2004.
No police action was taken at the time, but Barton was hit with a £60,000 fine by the Blues, and subsequently apologised for his actions.
Tandy, 25, who now plays for non- League Witton Albion, claimed he suffered a "major psychiatric deterioration" following the assault, which he said ultimately forced him out of the game at the top level.
He was released by City in 2005, after breaking his leg during a loan spell in Denmark.
A mediation hearing in Manchester has awarded £65,000 to Tandy - a sum significantly less than his original claim, which was understood to be £500,000.
Neither Barton, who now plays for Newcastle United, nor Tandy commented on the outcome. Although Barton didn't accept liability, he agreed to pay Tandy.
Tandy revealed in March he had battled alcoholism and depression as his career disintegrated following the cigar incident.
The former City youngster, who lives in Whitefield, said he turned to Tony Adams' Sporting Chance clinic for help to beat his demons - just as Barton did.
Tandy, who at one stage worked as a high-rise office window cleaner while playing semi-pro football, said: "When I was in rehab at Sporting Chance, part of the therapy helps you to discover where your alcohol addiction comes from.
“Alcoholism often runs in the family, but there was none of that in my background.
“And when I look back at when the drinking took over, it all stemmed back to that Christmas party.
“At the time, Barton hadn't been in trouble before. People thought it must have been my fault because he didn't have a reputation back then.
“Well, people know the truth now, don't they? He was fined sixty-grand and I kept quiet. In the end, it didn't matter, because City decided I was the one they had to get rid of.”
A spokesman for Barton said: “Joey is happy that the case has been settled to the content of both parties.
“He didn't wish for Jamie to have to go to court. And he hopes Jamie can put this behind him.
“He wishes Jamie good luck for the rest of his career.
“Joey is dealing with his issues and his working hard, and accepts his own frailties, and hopes the work Jamie is doing will have the same results.
James Reilly, an associate at Manchester-based Ralli Solicitors, who represented Tandy, said: “The parties have met and ended the case by way of mediation and all parties are bound by the terms of confidentiality.”
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Showing comments 1 to 14 and replies | View All
Nana Hughes (28/11/2009 at 12:28)
Glyn Chad, Aberdour, Fife (28/11/2009 at 12:45)
Boris The Rag Hunter, Cheshire Borders (28/11/2009 at 13:00)
Reidus, Cambridge (28/11/2009 at 13:22)
Portsmouth Blue (28/11/2009 at 17:54)
the fox, fox hole (28/11/2009 at 19:02)
Andrew Collinson (28/11/2009 at 19:38)
Ok 65 grand but lets be honest these fines or compensation claims should reflect the earnings of the culpable individual.....these clearly do not!!
Howlin Wolf, Withington (28/11/2009 at 20:28)
Lesser in spain (28/11/2009 at 20:44)
DUB RED, CLONDALKIN (28/11/2009 at 22:57)
The Colin - Leeds, Over the hills and far away (Mancunian Reject) (29/11/2009 at 01:14)
salfordrat (29/11/2009 at 14:57)
the fox, fox hole
I dont suppose we will ever know if he didnt 'make it' because he wasnt good enough or because this incident really did leave him traumatised. Or because somebody had to be gotten rid of to brush this under the carpet. Who can tell? Though it would seem he may well have been good enough or he would have been kicking a ball about in some sunday league somewhere. As for selling his story to a lowbrow newspaper - why shouldn't he? Who are you to judge? Millionaire celebritys, who certainly dont need the money, sell their crappy stories to crappy papers all the time. Why shouldnt this lad make a few bob out of the moronic british publics thirst for tat and scandal?
Abra Cadaver (30/11/2009 at 00:32)
28/11/2009 at 19:02
I don't understand the comment about the lad looking like he should be selling the Big Issue. His tee shirt probably cost more than one of your suits. If anyone should be selling the Big Issue, it's Barton!!
Andrew Shaw (01/12/2009 at 17:37)