In a front-page story the Daily Mail accused the five young men of killing Stephen Lawrence, the black student, and it challenged them to sue if they thought that the newspaper was wrong.
The allegation followed a verdict of "unlawful killing" by a coroner's jury that took the extraordinary step of adding that the murder of Lawrence, 18, who was stabbed to death at a bus stop in south-east London in 1993, was "a completely unprovoked racist attack by five white youths".
The five men who were accused by the Mail, David Norris, 20, brothers Neil Acourt, 21 and Jamie Acourt, 19, Gary Dobson, 21, and Luke Knight, 20, all from south-east London, have already faced a public and private criminal prosecution for the murder, but both cases collapsed. All five refused to give evidence at the coroner's court.
The police and legal system have come under attack for failing to convict Lawrence's killers.
Lawyers are angry at the Daily Mail's decision to accuse the men of murder, because they believe it is a dangerous precedent that will encourage "trial by newspapers", and because it makes a mockery of the legal system.
They also argued that because people taking libel cases are not entitled to legal aid, it would make it too expensive for most members of the public to try and challenge newspaper allegations of this type.
Nigel Pascoe QC, chairman of the Bar Council's Public Affairs Committee, said: "What happened to Stephen Lawrence is a vile and wicked killing carried out by evil racists." But he added: "I believe this [allegation] is a watershed, from newspapers offering critical hard hitting comment to being accusers, and judge and jury.
"This is a dangerous precedent and could lead to other newspaper making similar accusations and simply saying 'sue us' - something most people cannot afford. It's a slippery slope and could lead to injustice."
Conservative MP Roger Gale, chairman of the Conservative back bench Media Committee, told BBC Radio 4's World at One: "I think this is tabloid journalism at its worst because it's trial by newspaper."
But on the same programme Peter Wright, the Daily Mail's deputy editor, denied the paper was acting like a "kangaroo court" and said: "We have invited them to put up a defence. So far they have failed."
Lawyers representing the five white men named by the Daily Mail are believed to be considering legal action.
A solicitor representing one of the men said: "Anything's possible. If we decide to do it you will know about it."
A spokeswoman for the Attorney General said that the Mail had not committed a crime and that it was up to the five people who had been named to decided whether they want to pursue a libel case.
Lawyers for Lawrence's family are currently preparing to bring a civil action against the five men claiming damages, in an action similar to the one which was brought against OJ Simpson in the United States.
Over the last four years all five have at various times been charged with Lawrence's murder.
However, according to the Southwark coroner Sir Montague Levine, "a wall of silence and fear", preventing witnesses coming forward, hampered a successful prosecution.
A case against two of the youths was abandoned by the Crown Prosecution Service in July 1993 when it ruled that there was insufficient evidence to secure convictions.
The CPS decision to drop that criminal prosecution prompted the Lawrence family to launch a rare private case against the five young men.
After the private prosecution was launched, two of the five were discharged by a magistrate at the committal hearing and never stood trial.
The remaining three were formally acquitted at the Old Bailey last April, after a judge ruled that evidence from a friend of Lawrence who witnessed the attack, was unsafe.
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