Five men between the ages of 17 and 23 were arrested for allegedly raping a young girl on the 17th of August during Malaga's week-long annual fair.
But a judge quickly dropped the case after hearing the suspects' version of events and seeing mobile phone footage of the event shot by one of the young men.
The suspects told Spanish television stations that the sex was consensual and their lawyer said he would take action against the woman for allegedly making a false accusation.
Spain's Diario Sur newspaper reported that the girl, who appeared in court on Thursday to answer the charges, has now admitted inventing the rape story.
A key piece of evidence was a "selfie" taken at the moment of the alleged rape which showed the girl relaxed and smiling with three of the men on a fairground attraction safety mat.
She claimed in court that she had made the accusations to deter the men from releasing a one-and-a-half minute video of her engaged in sexual acts with two of them.
Five fairground workers testified that they had seen the acts taking place and stated that it had not appeared to them that the girl was being raped.
"If we'd thought she was being forced we'd have defended her," said one, "But she didn't look like she needed any help."