The claim by Brian Basham came as Lord King and BA agreed in the High Court to pay Richard Branson and his airline pounds 610,000 libel damages and costs put at pounds 3m. Lord King and BA also offered Mr Branson an unreserved apology over the campaign, which involved computer hacking, poaching of passengers, impersonation of staff, document shredding and press smears.
In an affidavit released last night, Mr Basham, whom Virgin claimed had run a smear campaign designed to destabilise the airline, said: 'At no time did I act without the knowledge or approval of the British Airways Board.'
Mr Basham added that on occasions he had attempted to 'discourage BA from disseminating disparaging and unsubstantiated rumours' about Mr Branson and Virgin.
In a supporting letter, Mr Basham's lawyer said that 'Lord King, Sir Colin Marshall (BA's chief executive) and Robert Ayling (director of marketing and operations) well know they and the company gave full authority to his actions and it was Brian himself who played a major role in exercising restraint in what was allowed to appear in the press about Branson'.
In a statement read out in court, Christopher Clarke, counsel for BA and Lord King, said that BA's directors 'were not party to any concerted campaign against Richard Branson and Virgin Atlantic'.
But Mr Basham's affidavit is set to cause a storm. Apart from Lord King and Sir Colin, who takes over as chairman in July, other members of BA's board include Sir Michael Angus, president of the Confederation of British Industry, the Honourable Charles H Price II, a former US Ambassador to Britain, and Lord White, chairman of Hanson Industries. Individual members of the board refused to commment last night and all inquiries were referred to BA headquarters. The episode threatens to tarnish BA's reputation and set back its ambitions to become a global airline; BA's proposed link-up with USAir might be compromised.
Mr Branson described the settlement as 'a complete and total vindication' for Virgin as he left the High Court.
The libel case arose out of allegations about a dirty tricks campaign made in an open letter from Mr Branson to BA's non-executive directors in December 1991. BA and Lord King responded that Mr Branson had fabricated the allegations to garner publicity. He sued BA, and the airline immediately responded with a counter claim over the initial allegations.
In yesterday's statement, counsel for BA and Lord King accepted BA employees had engaged in 'regrettable' behaviour which gave Mr Branson and Virgin 'reasonable grounds for concern' and agreed to pay Mr Branson pounds 500,000 in damages and his airline pounds 110,000.
George Carmen, QC, counsel for Virgin, told the court how Mr Basham, a consultant to BA, had conducted a campaign to plant hostile and discreditable stories in the press about its smaller rival.
BA was also engaging in 'switch selling' - contacting Virgin passengers and offering them inducements to switch to BA - obtaining information on Virgin passengers held on computer and shredding documents. In a statement after the hearing, Mr Branson said: 'For over two years we have been convinced that the actions of BA have consistently gone beyond the limits of any commercially acceptable practice.'
The campaign, split into several parts with codenames such as Mission Atlantic, Operation Barbara, Hunters and Helpliners, included, according to Mr Branson:
Illegal accessing of computer information on Virgin flights.
Approaching Virgin passengers at airports and telephoning them at home.
The shredding of documents relating to BA's activities.
Poaching of Virgin passengers by individuals falsely claiming to work for the airline.
Mr Branson named both Mr Basham and David Burnside, BA's public affairs director, in his statement. He also called on BA to give a full explanation of Operation Covent Garden.
According to Mr Branson, that was the codename given to an investigation carried out by private investigators paid for by BA and led by Ian Johnson, a security adviser to BA, which involved the targeting of Virgin Atlantic and the theft of dustbin bags.
Sir Colin Marshall said last night that, after its own investigations, BA was 'taking appropriate action to ensure that the regrettable incidents which we have indentified involving our employees do not occur again'.
But BA declined to say whether that meant any staff would be reprimanded or sacked, nor would it make any public statement about Mr Basham's claims that the board had approved his actions.
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