He suffered serious brain damage which has left him blind in one eye and partially sighted in the other, as well as affecting his cognitive abilities.

His mother, Tracey Bowler, has been fighting since 2006 to get adequate compensation for him. On behalf of Daniel, she sued the driver of the car, his former friend Daniel Roberts, of Evison Road, Rothwell.

They were on their way back from a day's go-karting when the accident happened. Roberts was fined £175 by Loughborough magistrates after being found guilty of careless driving.

As Daniel, a back seat passenger in the car, was not wearing a seatbelt, Mr Roberts' insurers agreed to pay him 85 per cent of a full valuation of his claim, and a trial was set to begin next week to assess the amount of the award.

But yesterday, before Mr Justice King at the High Court, final settlement terms were agreed which will see Daniel receive a lump sum of £3.5m to cover the costs of the care he will need for the rest of his life.

His barrister, Michael Tillett QC, told the court that his client – who is now 23 and lives with his family and carers in Lowestoft, Suffolk – needs constant monitoring or mentoring because of his brain injury and eyesight problems.

"Daniel's mother has borne a huge burden of care in this case," the barrister told the judge.

The settlement includes a payout of £25,000 to Daniel's mother for the selfless care she has given him over the past four years.

The family last year received a £696,000 interim payment to enable them to buy their new home in Lowestoft. This is included in the final settlement figure.

By Kate Cronin