Mr Aitken described his shock at the story in the Guardian: "My reaction was to be horrified. I felt poleaxed ... it was almost the equivalent of having a heart attack in terms of the shock and pain I felt on reading it."
Giving evidence on the second day of his libel action against the Guardian and Granada Television, makers of the World in Action programme, Mr Aitken continued: "I buried my head in my hands, and said to no one in particular that the Guardian have said on their front page I am a pimp. My son then made the polite inquiry 'What is a pimp, Daddy?' "
Mr Aitken, a former defence procurement minister and chief secretary to the Treasury, told the court that he had been on a skiing holiday in Switzerland when the article in the first edition of the newspaper was faxed to him late at night from London.
He said: "I had a sleepless night once I had read the Guardian's story. I said to myself in the long, dark night of the soul I have got to stand and fight. I have got to fight these lies, and I will do so."
Mr Aitken, 54, said he got up at dawn, caught the early flight back to London, and wrote a speech about how he was going to wield "the sword of truth and the shield of fair play" - words that he was to use at a press conference announcing his libel action on 10 April 1995.
He told Mr Justice Popplewell that he had "scrupulously observed" government guidelines which stated that on taking public office as a minister in 1992 all private business must stop. He denied being involved in any private deals with Arab businessmen while serving as a minister.
Mr Aitken is suing the Guardian and Granada Television over articles printed in the newspaper in 1995, and broadcast in the documentary series World in Action. The articles and the documentary claimed that he provided prostitutes for highly placed Saudis and had engaged in illegal arms trading.
His counsel, Charles Gray, QC, said the allegations had "butchered" the politician's personal, political, and professional reputation.
Mr Aitken told the court: "The Guardian gave me no notice of what they were going to publish, nor warning of what they were going to publish and no opportunity to respond to the serious allegations that they were going to make."
The report had been headlined "Aitken tried to arrange girls for Saudi friends", the judge was told. Turning to the World in Action programme "Jonathan of Arabia", broadcast in April 1995, Mr Aitken said: " I think they had a preconceived and pre-planned hatchet job. This was character assassination TV, not current affairs TV. There was no attempt at balance or objectivity. It was 'destroy Aitken' time."
The former minister said he had received a letter from World in Action producer David Leigh saying the programme was preparing a "profile" of him and requesting an interview. He was given five days to respond.
Mr Aitken said that he eventually proposed that he appear on a live show where he could be interviewed to refute any allegations made against him after the documentary was screened. But this offer was rejected by Granada because it it did not conform to the the traditional format of the programme.
Mr Aitken told the court that he had first met Prince Mohammed from the Saudi royal family during a business trip to Paris, and had kept in touch with him. On a subsequent visit to the Saudi capital Riyadh he met Said Ayas, an employee of the Prince.
Continuing his evidence, Mr Aitken told the court that he was introduced to his wife, Lolicia, by Mr Ayas's mother. And Mr Ayas and his sister later became godparents to Mr and Mrs Aitken's two daughters.
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