The book, called Dirty Tricks, wrongly suggested that a BA public relations consultant, Brian Basham, who was later fired, had been a peddler of lies in the company's dirty-tricks campaign against the new airline, said Mr Patrick Milmo, QC.
Mr Basham is suing the author of the book, Martyn Gregory, and its publishers Little, Brown for libel following its publication in March 1994.
Mr Milmo said the plaintiff had co-operated with the author, trusting the book would set the record straight after Mr Basham had been "cast to the wolves" by BA management. In a statement after the humiliating libel settlement in 1993, BA had made Mr Basham a scapegoat for the dirty- tricks campaign.
Unhappily, said Mr Milmo, his client's trust in the book was "sadly misplaced". Apart from accusing Mr Basham of leaking stories he knew to be untrue to the press, the book also suggested he tried to procure the false arrest of a bouncer at Heaven, a London nightclub which is owned by Branson.
Reading extracts to the jury, he said it suggested Mr Basham had used a journalist, Dominic Prince, to glean information about a report made by security consultants alleging there was drug dealing, male prostitution and a fire risk at the London club.
Outlining the history of the conflict, Mr Milmo said that the then chairman Lord King, the chief executive Sir Colin Marshall, head of marketing Robert Ayling and head of public affairs David Burnside, had become concerned about the favourable publicity surrounding Mr Branson's new airline. Mr Basham, employed as a consultant since 1985, had drawn up a detailed report outlining the rivals' "strengths and weaknesses". This included a reference to Heaven which Mr Basham regarded as "risky" because of its reputation and, therefore, a legitimate subject for discussion.
Mr Milmo said the defendants also relied on two interviews that his client had given in October and November 1991. The first, with the now- defunct Today newspaper, had been an attempt to trap Mr Basham, as the interview was secretly taped and later played to Mr Branson. In it, Mr Basham said he wanted damaging stories about Mr Branson which could be distanced from BA - a misleading interpretation, said Mr Milmo.
In the second, with Sunday Times journalist Nick Rufford, Mr Basham mentioned rumours that Virgin Atlantic could not get credit to buy fuel, but said the story needed checking out. The Sunday Times later ran an anti-British Airways story alleging dirty tricks.
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