The MP for Torbay, representing himself, told High Court judge Sir Maurice Drake that the item, in November 1992, appeared just four days after the newspaper settled his libel action over an editorial by paying substantial undisclosed damages. The item said 50 MPs had challenged him to demonstrate his concern for Maxwell pensioners by giving them the estimated pounds 250,000 libel damages which he won from the newspaper over articles concerning Robert Maxwell.
Mr Allason said there was no such challenge - an Early Day Motion with just seven signatures had not yet come into effect. By the time it "died", within a fortnight, it still only had 31 signatures.
The amount of damages, which the newspaper had asked Mr Allason to keep confidential, was in fact pounds 200,000.
The MP said the success of his action depended on publication of something false - which was uncontested - malice, and financial loss to himself. And he said the publicity caused him - in his role as Nigel West, author of non-fiction on security matters - to lose a publishing deal with the Holmes Security Group of New York.
The newspaper's former political editor, Alastair Campbell; political journalist Andy McSmith, now with the Observer, and MGN Ltd are contesting the action. The case continues.