High street chain Selfridges has offered £10,000 to the family of Frank Sidebottom's creator after it appeared to use his head in a window display.
Mannequins with faces very similar to that of the over-sized papier-mache creation formed part of their marketing campaign at their London store.
Chris Sievey, the man behind the cult figure from Timperley, Greater Manchester, lost his battle with throat cancer in June, aged 54.
The store has "sincerely" apologised.
Mr Sievey's partner Gemma Wood said she had received many phone calls since a national newspaper published photographs of Selfridges' display.
"People were very upset," she said.
But she added: "I spoke to the store on the phone and they said they were very sorry and are going to credit Chris."
'Reacted so quickly'
Fans hope to build a permanent memorial to Sidebottom in Timperley, the suburb he immortalised.
James Malach, who still runs the star's Radio Timperley website, said: "On the one hand they should have asked permission from the family, which I'm sure they would have given, but on the other hand this is the kind of fuss which Chris/Frank would have loved."
A Selfridges spokesman added: "After investigation we can see why some fans of Chris Sievey's character as well as some of the creator's friends and family have reacted so quickly to this feature of our current windows.
"We sincerely apologise if this has offended anyone and we have been keen to resolve matters quickly.
"We have offered to give £10,000 to Chris Sievey's estate and for them to decide how to best use this donation.
"We will also ensure that a suitable acknowledgement is made to Mr Sievey's work in our window displays and in-store."