Facing mounting public scrutiny for their handling of a bullying case that drove a 13 year old boy to commit suicide, the Japanese city of Otsu signaled they would settle a lawsuit filed by the victim's parents today, acknowledging for the first time a direct link between the harassment and the teenager's death.

Defense lawyer Yuichi Shiraki offered an emotional apology on behalf of the city, outside a packed courthouse.

"The school's insufficient actions and probe by the board of education…led family members and the victim to the depths of despair, leaving no choice but death," Shiraki said, his head deeply bowed. "On behalf of the city of Otsu, I deeply apologize."

The acknowledgement came less than a week after police launched an investigation into the boy's suicide last fall, amid growing suspicions the school and board of education tried to cover up the incident.

The middle school student jumped from his 14 th floor apartment last October after enduring excessive bullying at the hands of his classmates. In an anonymous survey conducted by Otsu's board of education, students reported the victim was pressured into shoplifting, had his legs and arms tied while bullies duck-taped his mouth. Some reportedly watched as their classmates forced the teen to eat dead bees, "pantsed" him, and forced him to "practice" committing suicide. Other students reported seeing teachers join in on the harassment, laughing at the victim as he was choked.

In one of his last acts, the victim texted his tormentors and left voice mails saying, "I'm going to die." They texted him back to say, "You should die."

Those revelations sparked national outrage with angry parents accusing teachers of looking the other way.

The number of bullying cases have declined in recent years, according to data from the Education Ministry, but critics argue those figures just provide a snapshot of the scope of the problem, since many victims are too afraid to come forward.

On Monday, Prime Minister Yoshihiko Noda denounced bullying as an "embarrassing and dirty" act, during a live interview with Fuji-TV. He then addressed the victims directly.

"There are people who care about you. I promise you there are people who want to protect you," he said. "Please believe that and report the abuse to your father, mother, teachers, friends, anybody."

In court, the three students accused of harassing the victim denied doing anything harmful, saying "We were just playing around," according to Japanese media reports.

The Board of Education has maintained they could not prove a direct link between bullying and the student's suicide, though chair Kenji Sawamura denied saying the abuse was not a factor.

The city has launched a new investigation into the case, while police plan to interview hundreds of students and parents before deciding whether to proceed with their own criminal case.

The teen's parents, who are seeking more than $950,000 in damages, acknowledged the city's apology but called for the truth to come out so other victims could be saved.

"Watching the press conference by the city and board of education, I cannot help but think my son was betrayed by them," the father wrote in a statement read by his lawyer.