Lawyers accuse FT of 'thoroughly irresponsible journalism'

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Collins Stewart's lawyers, Schillings, yesterday unleashed a fierce attack on the Financial Times, accusing its journalists of using James Middleweek's allegations to mount a "sustained campaign" against the company.

Schillings sent a vitriolic letter to the FT, saying its client intended to sue the newspaper. The letter contains details of taped conversations between FT journalists and their contacts which Schillings argues demonstrates evidence of "thoroughly irresponsible journalism".

The firm, which has a reputation for being one of Britain's most aggressive practitioners of libel law, claims that an unnamed FT journalist telephoned Justin Seager a fund manager at Jupiter Asset Management, saying he wanted to write an "unkind" article about Collins Stewart.

"For the Financial Times to indulge in this muck raking does a disservice to every known concept of objective reporting," the letter says.

The FT's articles, Schillings claims, helped to wipe millions off Collins Stewart's share price and also to damaged the "hard-won" reputation of the company, created by Terry Smith, its chief executive. The battle between Mr Middleweek and the company began last week when the disgruntled former employee's potentially very damaging allegations about the company came to light.

The row with the FT may, however, also have its roots in a disagreement between Collins Stewart and Pearson, the media and publishing giant which owns the FT. The two fell out badly when Mr Smith used a column he writes for The Sunday Telegraph to attack Pearson's accounting methods.

Mr Smith, who built a reputation as one of the most respected analysts in the City when he wrote a book in the early Nineties highlighting similar problems with other companies, suggested Pearson had used misleading accounting methods. The charge provoked an unnnusually fierce reaction from Pearson. A handful of very senior executives at the company contacted The Sunday Telegraph following publication of the article two months ago to complain.

Robert Peston, City editor of the newspaper, wrote a week later that he had been caught in the "crossfire" between the two, both of whom he had worked for.

Some insiders at Collins Stewart believe the FT's coverage of the allegations of Mr Middleweek are part of its desire to have its revenge on the brokerage.