Victoria Brittain, the newspaper's deputy foreign editor, was allegedly instrumental in the funding of a lawsuit brought by Kojo Tsikata, former head of the Ghanaian security service. Mr Tsikata issued a writ against The Independent in 1993 over an article which referred to the murder of three high-court judges in Ghana. The case is still going through the courts.
Yesterday Ms Brittain's lawyers issued a statement saying she had never knowingly received money from Libyan sources.
But there was no rebuttal of the claim that pounds 250,000 went through her bank account, and she did not deny the involvement of Mr Tsikata. Alan Rusbridger, the editor of The Guardian, drove to London from his Gloucestershire home for talks with Ms Brittain last night.
Details of Ms Brittain's alleged role in funding the suit against The Independent were revealed yesterday by David Shayler, a former MI5 officer who said Ms Brittain's telephone was tapped in 1993 after her bank told police about a deposit of pounds 100,000 into her account. Under money laundering laws, banks are required to report sudden unexplained appearances of large sums of money.
In an interview with the Mail on Sunday Mr Shayler said MI5 quickly established that much of the money - which was later boosted to pounds 250,000 - had been transferred from Libyan sources. He said they included the Libyan Arab Foreign Bank and Khalifa Ahmed Bazelya, head of the Libyan interest section at the Saudi Arabian embassy in London.
MI5 wrongly believed they were on to a serious - if unorthodox - money- laundering operation. However, after 12 months, they realised that some of the money was being paid to Bindman & Partners, a London firm of libel lawyers who were representing Mr Tsikata in his lawsuit against The Independent. There is no suggestion Bindman & Partners knew of the alleged origin of the money.
"The Libyan involvement was, on this occasion, no more than an attempt to curry favour with the Ghanaian regime by paying Tsikata's legal bills," said Mr Shayler. When MI5 realised there was nothing more sinister in the arrangement than the funding of a libel action, surveillance of Ms Brittain's north London home was halted.
Mr Tsikata sued the publishers of The Independent after a report in 1992 about a public inquiry into the execution of three high-court judges in Ghana. The Court of Appeal upheld The Independent's argument that a fair and accurate report of the inquiry's proceedings was privileged. Last month, Mr Tsikata was refused permission to appeal this decision to the House of Lords. Mr Tsikata's solicitors have indicated that he intends to proceed to trial with the argument that The Independent's publication of the report was "malicious".
Last night Bindman & Partners, Ms Brittain's solicitors, said: "We are assured by our client, Victoria Brittain, deputy foreign editor of The Guardian, that she has never, to her knowledge, received any money at any time from Libya, either for her personal use or for any other purpose. She had never heard of Khalifa Ahmed Bazelya until she read his name in today's Mail on Sunday." She declined to comment further. The Guardian said it had nothing further to add.Reuse content