To remedy the contradiction between the equal strain assumption and the flow continuity assumption at a soil–column interface, the traditional flow continuity assumption was abandoned and the radial and vertical flows within a stone column were incorporated to consider the column consolidation and deformation in a coupled fashion. Moreover, two possible variation patterns of the horizontal permeability coefficient of soil within the disturbed soil zone were included, to reflect the detrimental influence on the surrounding soil due to column construction. In addition, a linearly changed total vertical stress along the column depth was assumed, to achieve a more realistic stress distribution in practice. By considering the above mentioned characteristics, the governing equations for this type of consolidation problem were developed. The solutions for the governing equations were subsequently derived by using a new initial condition obtained from the equilibrium condition and equal strain assumption. On the basis of this, the average degree of consolidation of the composite foundation was obtained and discussed. Finally, a parametric study was performed and an application example was introduced to help engineers better utilize the present solution when applied to an actual design.