LSE embroiled in row over authorship of Gaddafi's son's PhD thesis and a £1.5m gift to university's coffers

Controversy over links between the London School of Economics and Libyan regime intensified last night, as it emerged that Saif al-Islam, the Libyan leader's son, could be stripped of his doctorate.

Amid claims that his LSE thesis may have been ghost -written, the LSE is investigating allegations of plagiarism and in a statement yesterday, confirmed a degree can be "revoked if there are substantiated concerns about the manner in which it was attained – for example if there is a later discovery of plagiarism."

The university is seeking "specific information" regarding "direct allegations" of plagiarism and is carrying out its own checks.

After getting his PhD in 2008, Saif al-Islam made a controversial £1.5m gift to the LSE from his organisation – the Gaddafi International Charity and Development Foundation (GICDF) – in 2009.

It has emerged that Professor David Held, co-director of the Centre for the Study of Global Governance which benefited from the donation, and an informal mentor to Mr Gaddafi's son, was appointed a trustee of GICDF in June 2009 – before the LSE formally accepted the £1.5m donation in July 2009.

Last week, the LSE cut its ties with GICDF, refusing to accept any further funds beyond the £300,000 already received.

Speaking to the IoS, Professor Held said he became a trustee after an initial decision was made, in June 2009, to accept the money. He said that an LSE Council meeting several months later (October 2009) raised the issue "that being on the board may involve a conflict of interest with the grant" and he was asked to step down.

" Would I accept that I should have been on the board? No, but I'm glad that the LSE took the decision to say I should have come off it, and I did," he said.

Professor Held denies any impropriety. Although he was not Saif al-Islam's PhD supervisor, he met him as "an informal advisor". He recalled that he "was not a great student" but improved. Professor Held added: "After he handed in the thesis, there was a rumour that he may not have been the sole author... I wrote straight away to his supervisor, but there was no substantial evidence."

A statement issued by the LSE Students' Union yesterday said: "LSE students are angry and upset that university officials are using degrees at the LSE to raise vast sums of money. There are serious questions about Saif al-Islam's PhD, and we call for an external investigation into the matter."

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