Added to an allegation of drunkenly groping another child, police finally charged Ferguson in May last year.
He denied the charges but was denied bail, partly because of convictions for violence on his criminal record.
Ferguson spent the next 10 months behind bars as an accused sex offender.
After Judge Crosbie officially cleared him, he walked out of the dock a free man and tearfully embraced family members outside court.
Ferguson said yesterday he was overwhelmed and ''glad the truth came out in the end''.
''The last 10 months have been emotionally draining on me and my family. I've missed out on so much stuff.''
Despite the ordeal, the man said he bore no great animosity towards the girl who lied about him.
''I do feel sorry for the complainant for carrying those lies around for so long,'' Ferguson said.
''It feels great to finally have my name cleared.''
The jury sat through almost two days of evidence before the climax to the trial on Tuesday.
After viewing more than three hours of video interviews with the young girl, during which she gradually painted a picture of constant abuse, counsel Anne Stevens cross-examined.
In her opening, she told the 12 jurors the allegations against her client were fabricated; and so it proved.
''Mrs Stevens' questions were firm but fair and initially elicited some responses that saw [the complainant] become upset and need to take a break,'' Judge Crosbie said.
When the trial resumed, the girl said none of it had happened.
She had lied.
The jury was asked to leave and the judge ''gently'' reminded her of the importance of telling the truth.
Crown prosecutor Craig Power then took the teen through each of the seven charges that came about because of her accusations.
''[She] said Mr Ferguson did not touch her on any occasion,'' the judge explained to the jury before dismissing them yesterday.
''She confirmed she was not under pressure and she was telling the truth.''
The girl told him she was having family problems at the time.
''That's her roundabout explanation,'' Judge Crosbie said.
Though scenarios like it were not unheard of, the judge said, ''what you've seen is out of the ordinary and what we'd regard as an exceptional case''.
''I'm satisfied we now know the truth. What you have is a trial process that's worked,'' he said.
After considering the matter overnight, Power yesterday elected to offer no further evidence on the charges and Stevens applied for a dismissal.
Judge Crosbie said both counsels' actions were ''appropriate'' and granted the application.
Though the complainant had stood by her allegations at trial, he noted the police had opted not to press charges following her statement in 2011.
''It's fair to assume the decision was based on insufficiency of evidence or the complainant or both,'' the judge said.
A Rape Crisis Dunedin community educator Anna Hoek-Sims said false allegations made it harder for real sexual-abuse victims to come forward because most feared they would not be believed.
"Our understanding is that of all sexual violence complaints that are pursued in court, only 2 to 3 per cent of these cases are ones in which the complainant admits giving false evidence," she said, adding it was important to consider why it happened.
''I think we need to keep in mind that people who make false complaints often make them for another reason, such as personal issues, health issues or even past history of sexual violence and often when something like this happens, the person can be forgotten in the fury that follows a false accusation.
''I hope that in this case, the person receives the support they need.''
