After a seven-day hearing and more than four hours of deliberation, the jury was discharged by Mr Justice Drake. A suggestion by Richard Hartley QC, for Mrs Bauwens, that the judge should adjudicate was rejected by George Carman QC, for the People, who said: 'An invitation to dance comes too late at this stage.'
The legal costs are estimated at pounds 192,000 and each side must bear its own share, pending a retrial - which will surely take place, according to Mrs Bauwens and her husband, Mohammed Shourjabi. Outside the court, Mrs Bauwens said: 'I would like to thank the judge and the jury, although I am very disappointed that they were not able to reach a consensus verdict . . . . We go for a retrial. I'm going to fight on.'
Mrs Bauwens, 31, a film producer, sued the newspaper over a report in September 1990 that criticised Mr Mellor, then Minister for the Arts, for accepting a holiday to Marbella, paid for by Mrs Bauwens, while British forces were being sent to the Gulf. Mrs Bauwens's father is Jaweed al- Ghussein, an executive committee member of the Palestine Liberation Organisation, which was supporting Saddam Hussein.
Mrs Bauwens said that to link her with her father's support for the PLO suggested she was a 'social leper' not fit to be seen with a government minister. She was apparently supported by Mr Mellor's wife, Judith, who appeared in the public gallery early in the hearing and again yesterday.
But after a trial during which Mr Carman questioned Mrs Bauwens over occasions when Mr Mellor visited her alone for tea and accused Mr Mellor of putting his head in the sand like an ostrich, 'thereby exposing his thinking parts', the jury was not convinced anyone had been libelled.
Richard Stott, editor of the People at the time of publication, said he expected Mr Mellor to resign. 'We would have preferred a verdict in our favour, but I am absolutely delighted that half the jury has taken the view that we were correct.' A retrial would be fought rigorously. 'We will have a great deal more material to put next time.'
Hung verdicts in libel cases are extremely rare. Two years ago a jury was split on whether the Labour MP Brian Sedgemore had been libelled by Robert Kilroy-Silk, who called him a 'craven hypocrite'. Mr Sedgemore later dropped the action.
Downing Street insisted again yesterday that Mr Mellor would not resign.