The former Scottish Socialist Party leader won a £200,000 defamation action against the newspaper in August 2006 after it published false allegations about his love life.
He instructed lawyer Gordon Dangerfield to go to the Court of Session in Edinburgh last year to argue he was entitled to another £200,000 payment from News Group Newspapers.
Mr Dangerfield wanted judge Lord Turnbull to award the sum because journalists at the publication broke the law by hacking Mr Sheridan’s mobile phone.
The solicitor advocate argued the publishers of the paper should be punished for allowing its employees to use illegal methods to acquire information about Mr Sheridan.
He said his client, who was jailed in 2011 for committing perjury during the defamation action, had also committed wrong doing, but it was at “many levels below” the conduct of the News of the World.
In a judgement issued yesterday at the Court of Session, Lord Turnbull refused to grant the extra payment to be paid to Mr Sheridan.
The judge allowed Mr Sheridan to receive the £200,000 payment for defamation, which News Group Newspapers has already paid, and also awarded the costs in his favour.
Lord Turnbull, who also criticised the “utterly reprehensible” conduct of the News of the World in the judgement, wrote: “There can be few other civil cases heard in modern times which has attracted such notoriety.
“I know of no other civil case in which a litigant, who sought to vindicate his reputation through an action for defamation, emerged as a criminal convicted of perjury and at the same time secured an award of very substantial sum of money.
“To include within the award of damages in the verdict a further £200,632 would be a step which many would find difficult to comprehend not least those who suffered injury to their standing and feelings as a consequence of the pursuer’s conduct towards them in court and went uncompensated.
“The circumstances associated with this case, which I have outlined, are to my mind self evidently exceptional. They seem to me to be the sort of circumstances which can be thought of appropriately as being reasons special to the case such as to entitle me to exercise my discretion in favour of declining to make an award of interest to run from any date prior to decree.
“That is the step which I shall take. Since the principal sum was paid prior to the enrolment of the motion to apply the verdict, I shall make no order for interest.”
Mr Sheridan sued the News of the World for defamation after the paper published a story in 2004 alleging he had cheated on his wife Gail with a woman called Fiona McGuire.
A jury awarded him £200,000 after Mr Sheridan described how the claims made by Ms McGuire detrimentally affected his reputation of being a family man.
The paper claimed he was an adulterer who attended a swingers club. Mr Sheridan denied ever doing these things.
However, in December 2010, Mr Sheridan was convicted at the High Court in Glasgow of committing perjury during the defamation proceedings.
The jury found he deliberately lied during the defamation case and he actually visited the swingers club and had sex with nurse Katrine Trolle at the same time he was married to Gail.
During the defamation case, Mr Sheridan, who sacked his lawyers, accused Ms Trolle of being a “conscious liar” when she said in evidence that she had sex with him.
Mr Sheridan then returned to the Court of Session last year in a bid to have the News of the World’s publishers pay his client’s legal bill.
Mr Dangerfield also wanted the court to order that interest of eight per cent per year be applied on the £200,000 defamation award from year from the publication of the story in 2004 to May 2017. The lawyer said this would mean that News Group would owe his client another £200,632.
He said the money should be paid out because of the News Of the World’s use of criminal methods.
This prompted Lord Turnbull to comment Mr Sheridan had “something in common” with the News of the World.
During the proceedings, News Group’s advocate Roddy Dunlop QC said it could “be taken as read” that Mr Sheridan’s phone was hacked.
But he argued that News Group shouldn’t be liable to pay the extra sum.
Lord Turnbull agreed. He wrote: “There is no other basis upon which the court could or should engage in a punitive exercise against the defenders in relation to expenses on the motion of this pursuer.
That would be to risk giving the impression that the court thought less of his misconduct than that of the defenders.
“Each led false evidence about certain important things and each led truthful evidence about certain important things.
“Beyond that broad observation, the only other comment I would make is that I did not consider that Mr Dangerfield’s assessment of the pursuer’s conduct as ‘many levels below’ that of the defenders was accurate.”
Lord Turnbull also criticised Bob Bird, the former Scottish editor of the News of the World in his judgement. He also criticised the paper.
The judge said a plan to have Ms McGuire ‘spirited away’ to Dubai during the defamation proceedings was wrong.
He added: “I accept, as is obvious, and has been so comprehensively demonstrated by the events which have unfolded over the years since the jury trial concluded, that some of those associated with the News of the World conducted themselves, on many occasions in ways which were entirely unacceptable.
“Some even engaged in criminality. In preparation for the civil jury trial it seems clear that the defenders engaged in phone hacking and other unwarranted invasions of privacy.
“For the defenders to have paid to have Fiona McGuire spirited away to Dubai in order to thwart a motion to have her recalled was utterly reprehensible.
“Mr Bird, in particular, conducted himself in a manner which might have warranted criminal proceedings had the arrangement been successful.
“He abused the trust of the court in allowing him to remain in the court room throughout the proceedings. As it happens of course, no motion, to recall this witness was in fact made and the money was wasted.”