Heseltine 'should pay' after losing libel case

Michael Heseltine, the Deputy Prime Minister, came under fierce Labour attack last night after the Government was ordered to pay pounds 40,000 in libel damages to a television journalist, in what is thought to have been the first successful action of its kind.

The damages, plus pounds 15,000 legal costs, went to Martyn Gregory, who had sued the Department of Trade and Industry in the High Court after ministers described the allegations he made in an award-winning Channel 4 programme about the supply of torture equipment as "contrived" and "scaremongering".

John Prescott, deputy leader of the Labour Party, yesterday wrote to John Major demanding to know under what government regulations taxpayers' money was being used to finance the outcome of the action. Mr Prescott said Mr Heseltine should have all "the costs arising from his libel deducted from his ministerial salary".

The Dispatches programme, entitled "The Torture Trail" was broadcast on 11 January. Geoffrey Bindman, Mr Gregory's solicitor, told Mr Justice Waterhouse that it contained statements by representatives of three British companies - the Royal Ordnance Division of British Aerospace, International Procurement Services and ICL Technical Plastics - that they had supplied electric shock equipment to countries where it was liable to be used for torture.

The statements were volunteered to Mr Gregory, who had posed as an agent for a fictitious foreign buyer. The judge was also told that Hiatt and Co was supplying over-size handcuffs for conversion by distributors abroad into leg-cuffs.

In response to members of the public who had seen the programme and expressed concern, Mr Heseltine, the then President of the Board of Trade, and two of his junior ministers, Richard Needham and Ian Taylor, sent out a standard letter.

It said that the programme makers had persuaded companies to offer to supply goods to make a story which did not otherwise exist. They also suggested the programme had detracted from the DTI's attempts to prevent the very kind of abuse which the programme was concerned to expose.

Mr Bindman said in court that the programme was properly researched and the accusation that Mr Gregory had made a programme he knew to be false was entirely unjustified.

The programme made it clear that Mr Gregory was posing as a buyer - the only practicable way of investigating such a secretive trade - and the company representatives made their statements without any persuasion.

Stephen Suttle, counsel for the DTI, apologised and accepted that there was no justification for casting doubt on the programme makers' integrity. But this did not entail acceptance by the DTI of the accuracy of the allegations about government connivance, he said.

The department was satisfied that no export controls had been broken and that there was no truth in the claim by a British Aerospace representative that the company supplied electric shock batons to Saudi Arabia under cover of the government-to-government Al-Yamamah arms deal.