The 87 year old has been cleared of groping an eight-year-old fan, by the Court of Appeal.
Three judges in London ruled the conviction was ‘unsafe’ – but rejected applications to challenge the other 11 indecent assault charges.
Appeal judge Lord Justice Treacy explained a key witness in the trial gave a statement that was ‘a fantasy’.
A witness claimed he remembered getting autographs for his young children during the former entertainer’s visit to Leigh Park Community Centre,
He told the jury this had been while he was on leave from Korea in 1969 – despite the war having ended before this.
According to the Daily Mail, Lord Justice Treacy said: “The information now available about his military service and employment history tends to suggest that his account of recent service in Korea was a fantasy.
“For some reason, at the time of trial the necessary checks had not been made or had not properly been made as the subsequent investigation by DC Atkin showed.
“In our judgement, this was a significant failing. If the material had been obtained and disclosed at the correct time it is very doubtful that Mr James would have been called as a witness.
“If he had been called to give evidence, his credibility would have suffered devastating damage.
“He was the only person, apart from the victim, to confirm a visit by Rolf Harris to the centre at the relevant time.”
Harris failed in his bid to have his other 11 convictions overturned, with all three judges explaining: “We find nothing that causes us to doubt the safety of those convictions.”
He was jailed for five years and nine months back in 2014, after being found guilty of 12 charges of indecent assault.
The former BBC star was released from HMP Stafford earlier this year, after serving less than half of his sentence.